AMP Limited has entered into an agreement for the sale of Collimate Capital’s real estate and domestic infrastructure equity business to Dexus Funds Management Ltd (Dexus), for an upfront cash consideration of $250 million.
In addition, Dexus will acquire all of AMP’s existing ($180 million) and committed ($270 million) sponsor stakes in the platform for cash consideration expected to be up to approximately $450 million, subject to discussions with fund investors, pre-emptive rights processes and applicable consents.
The transaction will significantly strengthen AMP’s capital position and it intends to use the proceeds to pay down some of its corporate debt and to return capital to shareholders following the sale completion.
Collimate Capital is a top 10 global manager in infrastructure equity and has $9 billion in invested AUM in international infrastructure equity, with prime international assets including transport and logistics, energy and utilities, and digital.
AMP Limited Chair, Debra Hazelton said: “The sale of the real estate and domestic infrastructure equity business is a strong outcome for AMP shareholders and Collimate Capital stakeholders.
“As we work towards completing the transaction, a key priority for our board will be returning capital to AMP shareholders in acknowledgement of their patience as we have pursued options to maximise value for them.
AMP Chief Executive, Alexis George added: “In Dexus we have found a strong owner for the real estate and domestic infrastructure equity businesses, which will add significant value through their strong track record and experience in real estate and asset management. Their depth of talent will strongly complement our specialist teams.
The transaction perimeter for the sale of the real estate and domestic infrastructure equity business includes:
- $31 billion invested AUM, including domestic real estate AUM of $21 billion and infrastructure equity AUM of $10 billion
- The management platform, including all domestic funds and mandates
- Real estate and infrastructure business unit teams and a range of support teams
- All of AMP’s sponsor investments in real estate funds, including the future committed investments AMP announced as part of its FY 21 result.
- AMP will retain its 24.99% equity stake in PCCP and sponsor stake in PCCP Fund VIII (total book value of $208 million as at 31 December 2021).
AMP Limited has also entered into an agreement for the sale of Collimate Capital’s international infrastructure equity business to DigitalBridge Investment Holdco, LLC, a wholly-owned subsidiary of DigitalBridge Group, Inc. (DigitalBridge) for an upfront consideration of $462 million and total value of up to $699 million.
Combined with the $430 million from the sale of the domestic infrastructure equity and real estate business and the $578 million from the sale of the infrastructure debt platform completed in February 2022, this values the total Collimate Capital business at up to $2.04 billion including the value of retained assets, and up to $2.5 billion when including the maximum earn-outs.
Subject to the completion of the Collimate Capital sales, AMP will no longer pursue a demerger of Collimate Capital.
The Board determined that, when evaluated against a demerger, the two transactions would deliver greater value and certainty for shareholders, accelerate the realisation of that value, and provide greater stability for Collimate Capital’s clients and employees. As part of the transaction, key employees in Collimate Capital have also committed to moving to the new businesses to ensure continuity for clients.
“The transactions we have announced in the past two days represent a strong outcome for AMP shareholders and Collimate Capital stakeholders. It was clear in our 2021 portfolio review that we had two businesses that would be better separated and simplified and in doing so realise greater value and that is what we have achieved,” said Hazelton.
“AMP and Collimate Capital have built outstanding private markets businesses in infrastructure and real estate over many years. In selling these businesses to such respected specialists in DigitalBridge and Dexus, we are confident that the businesses’ clients and the talented teams transferring with them will benefit.
“Post separation and these sales, AMP Limited has a focused strategy to grow AMP Bank and the wealth management businesses under CEO Alexis George’s leadership with the benefit of a stronger capital and liquidity position.
“As we work through the capital implications of the transactions the Board will be focused on returning the majority of cash proceeds to AMP shareholders.”