Boe Pahari, the global infrastructure head of AMP Capital is to step down as part of parent company AMP’s proposed plan to demerge and list its A$50bn (€32bn) private markets arm from the group.
The move to list AMP Capital’s real estate, infrastructure equity and debt platform on the Australian stock exchange under a new name comes after AMP ended merger talks with US manager Ares Management.
Internal separation of private markets, including establishing operational independence for management, new branding and a board – to be chaired in the interim by Michael Sammells, current chairman of AMP Capital – is to start immediately.
AMP chair, Debra Hazelton, said: “Our portfolio review confirmed that AMP has two distinct businesses, in retail wealth and institutional private markets, with different client bases and growth opportunities.
“From the extensive work that has been done, we believe that operational and structural separation will significantly benefit both business units.”
Talks with Ares began in October last year, initially to take over the whole of the AMP financial group for A$6bn. In February, Ares switched its focus to AMP Capital, AMP’s private markets arm, when it discussed entering into a joint venture with AMP.
Hazelton spoke of “substantial and constructive” discussions with Ares regarding a sale, but said the two parties were not able to reach an agreement that would deliver appropriate value for shareholders.
“The board has therefore concluded that a demerger provides investors with the strongest value outcome, creating two more-focussed entities, with the agility to pursue new growth opportunities in their respective markets.”
On demerger, existing AMP shareholders would receive shares in the newly-listed entity proportional to their existing shareholdings in AMP.
AMP plans to retain a minority stake of up to 20%.
To read the digital edition of the latest IPE Real Assets magazine click here.