AMP and Ares Management Corporation have entered into a non-binding agreement to form a joint venture for AMP Capital’s Private Markets businesses including infrastructure equity, infrastructure debt, real estate and other minority investments.
Ares will acquire 60 per cent of Private Markets for A$1.35 billion. AMP will retain 40 per cent, valued at A$900 million. Ares will assume management control and will have the majority of board seats.
”Ares, with a current market capitalisation of more than US$13 billion, has a global footprint and capabilities in credit, private equity and real estate which are highly complementary to Private Markets,” said in a joint statement.
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“We believe the proposed partnership with Ares would deliver strong outcomes for our clients, our shareholders and our broader business. We expect it would strengthen the business and significantly accelerate our strategy to grow private markets, while de-risking our international expansion plans, and bringing forward the value in AMP Capital for our shareholders. The joint venture would also enable AMP shareholders to participate in anticipated accelerated growth from a business with increased global scale and capability,” said Francesco De Ferrari, AMP Chair Debra Hazelton and AMP Chief Executive.
“The transaction will enable AMP to increase focus on the transformation of our wealth management business in Australia, drive the continued growth of AMP Bank and New Zealand wealth management and benefit from driving further efficiency. We look forward to working towards a binding agreement with Ares, which will mark the conclusion of the portfolio review.”
“We are excited to further expand our real estate and infrastructure investment capabilities through our partnership with AMP. We believe we can add significant value through our global scale, relationship network, investor relationships and our broad, collaborative investment platform. We’ve been impressed by the growth of AMP Capital’s private markets business over the past several years and our time with the team as part of the portfolio review has further cemented our view on the intrinsic value of this business under our leadership. We expect that this transaction would be highly strategic and complementary to our business and financially accretive for our shareholders,” said Michael Arougheti, Ares Management Corporation Chief Executive.