Capital ultimately backs capital. While politicians might make the headlines, it’s the bond markets that keep the score – and governments forgetting this cast-iron rule ultimately pay the price.
With US President Donald Trump overturning the 80-year world order, it has never been more imperative for Australia – including financial institutions – to nurture a better understanding of the Middle Kingdom.
AMP Capital rebrands as suitors circle
AMP Capital has a new name and new suitors as it approaches a demerger in June. But AMP CEO Alexis George is playing her cards close to the chest.
After a short stint as “PrivateMarketsCo”, AMP Capital will become Collimate Capital in an effort to provide a clean slate in the aftermath of the Boe Pahari debacle. It will also have the effect of creating an identity that isn’t tied to its antipodean birthplace in a time when around 61 per cent of its institutional clients now lie outside Australia.
“Collimate is actually a scientific word that means to align the rays of light, and it talks to the ways in which we want to align with our clients,” said Collimate CEO Shawn Johnson. “For those of you who happened to study optics or telescopes, a lens that perfectly collimates light is said to have a focal length of infinity. That talks to our vision for the future, our long-term orientation in terms of value creation, and our alignment with our clients.”
While it’s likely in better shape than its parent business, Collimate has seen its share of upheaval in the last few years. It shed its infrastructure debt business in a deal with private equity player Ares in 2021 as part of the same simplification strategy that saw its global equities and fixed income arm sold to Macquarie.
It also lost its Diversified Property Fund to Dexus, resulting in fee concessions being given out in its core infrastructure and retail businesses, and has experienced “subdued” fund raising due to the “nature of the demerger”. Its $7 billion office fund is also facing renewed investor dissent despite its independent board opting to remain with AMP Capital.
AMP CEO Alexis George has previously indicated that AMP will retain up to a 20 per cent stake in the business in order to provide short-term benefits to the balance but that it had no interest in retaining what one analyst described as a blocking stake that could limit upside for the demerged entity.
“It would be for balance sheet and financial stability across those two businesses,” George said. “I’ve been very clear in the past and I’ll be clear again today: AMP Limited has no interest in maintaining that stake over the longer term and we would want to work with Collimate to bring down that stake over time. We wouldn’t be looking for control or board positions in the interim. We want to allow Collimate to grow and flourish by itself.”
Media reports have also indicated that up to three potential suitors for the demerged entity have emerged. George tamped down on speculation in the analyst briefing and did not answer whether AMP had opened its books to any of the potential suitors. The new business is set to list in June.
“It’s not unusual. We’re in the middle of a demerger and we’ve got scheme booklets coming out in April… There has been some interest in relation to the business,” George said. “You can see that we’re pushing ahead with the demerger, and if there was any substantial interest we’d consider that in light of our fiduciary responsibilities.
