Dexus makes a move on $4b plus AMP Capital property fund Sep 5,...

Dexus makes a move on $4b plus AMP Capital property fund
Sep 5, 2020 – 4.33pm
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Real estate fund manager Dexus is seeking to pinch the rights to one of AMP Capital's big Australian investment funds.

It is understood Dexus is seeking merge one of its own funds with the AMP Capital Diversified Property Fund, which invests on behalf of wholesale clients and has about $4.5 billion in assets including stakes in the Pacific Fair shopping centre on the Gold Coast, Macquarie Centre in Sydney and the Quay Quarter skyscraper overlooking Sydney Harbour.


Quay Quarter Tower at 50 Bridge Street in Sydney's CBD. supplied

It is understood Dexus recently wrote to all of the AMP fund's investors, to gain their support for the mooted transaction.

Sources said Dexus pointed out the superior performance of its own fund and potential benefits for the AMP funds investors should the two entities merge.

It is understood Dexus was happy with the support received from the AMP fund's investors, and put a merger proposal to the responsible entity, which is another AMP Capital subsidiary; AMP Capital Funds Management Ltd.

who sold his former business Fort Street Advisers to Evans and Partners owner Evans Dixon in 2018).


Senior real estate sector banker, Richard Hunt, is understood to be advising AMP Capital. Louise Kennerley

Investors said it was up to the responsible entity to decide whether to grant Dexus due diligence.

AMP puts everything on the table
It's a big decision for AMP Capital, which is a global investment manager with $192.4 billion in assets and $27.7 billion in direct property investments in the Asia Pacific, and comes at an important time.

AMP Capital's owner, AMP Ltd, has called in investment bankers and put its whole portfolio of assets under review, including AMP Capital, following what it said was a pick up in expressions of interest received from potential suitors.

AMP Capital is the most valuable part of AMP Ltd, according to sum of the parts valuations from sell-side analysts, and AMP recently bought back a 15 per cent stake in the funds manager to value it at $2.7 billion.

Losing the rights to manage funds such as AMP Capital Diversified Property Fund would likely diminish the value of the wider business.

Of course Dexus' approcah also comes as key institutional clients have put AMP Capital on notice over cultural and social responsibility concerns, after AMP promoted Boe Pahari to lead AMP Capital despite his having been penalised after settling a sexual harassment claim brought against him in 2017 by a female employee. Pahari has since returned to his former job as head of infrastructure equity, while AMP chairman David Murray and director John Fraser stood down from the company's board.