AMP | OBSERVATIONS, page-47

No I don't think so.

They were in the debt markets last week with an offer very tight over BBSW. So raising equity at these levels really makes no sense, nor is it needed.

I think if you read between the lines with Alexis re AMP's possible retention stake in AMP Capital of 20%, she is trying to hedge her bets and keep a liquidity option for AMP headstock up her sleeve. The problem is that this retained stake, also serves as a drag over the PMCo price post demerger as people will know that AMP are sooner or later a seller. Alexis has been very clear, she wants capital to fund growth in the bank. I do like how she flogged off MoneyBrilliant, basically signalling that they won't waste a cent on any digital advice moonshots until they are first running their existing business properly (which they haven't been close to doing for decades).

The challenge at present will be how to carve up the balance sheet between:

AMP Australia

and

PMCo

As PMCo currently carries a decent chunk of capital when one considers co-investments in the underlying funds.

So I expect internally they will be having some hard conversations around this as both parties want to retain the best balance sheet they can to give them some optionality post-listing.