Dexus triumphs in controlling the management of the AMP Capital fund
Dexus triumphed in its attempt to wrest control of the $ 5.4 billion wholesale property managed by AMP Capital, leaving parent company AMP injured.
The deal will allow Dexus Wholesale Property Fund to hold stakes in some of the country’s most sought-after trophy assets, including the $ 2 billion Quay Quarter Tower in Sydney’s Circular Quay and Westfield Warringah Mall on the beaches North.
At an investor meeting on Tuesday, AMP investors voted overwhelmingly in favor of the merger plan that began last year when Dexus first presented a non-binding indicative proposal to AMP investors Capital Diversified Property Fund (ADPF).
This now puts a big question mark on the viability of the plan proposed by AMP Limited to separate the private market activity which accounts for the lion’s share of AMP Capital’s value.
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AMP Capital has seen recent exits and maintaining the management rights of one of its main real estate funds has been a key element in keeping the business intact. ADPF is a diversified real estate investment fund that was ranked among the top performing funds in the MSCI / Mercer Index over the two year period ending March 31.
Kylie O’Connor, head of real estate at AMP Capital, said that while AMP Capital has submitted a compelling alternative proposal with significant financial backing, the company respects investors’ decision to seek the scale that the merged fund will provide. .
“Real estate remains an integral part of the private markets business of AMP Capital, which is on the cusp of separating from AMP Limited,” she said.
“The team strives to continue providing innovative real estate investment solutions to investors, as well as growth opportunities, under the newly created entity.”
Ms O’Connor said that AMP Capital, which had also been involved in merger discussions with US investment manager Ares, had provided an alternative proposal to ADPF unitholders, but the independent board committee has recommended the Dexus proposal.
Dexus Wholesale Property Fund, which has $ 10.1 billion in funds under management, will also be boosted by minority investments in two other wholesale funds managed by AMP Capital – the AMP Capital Wholesale Office Fund and the AMP Capital Shopping Center Fund. .
Dexus will provide $ 400 million in initial liquidity to the unitholders of ADPF who will repurchase the units of ADPF, which will be provided by the acquisition of existing ADPF assets.
Dexus Chief Executive Officer Darren Steinberg said he was pleased that both groups of unitholders have shown confidence in Dexus’ capabilities by supporting the merger proposal.
“We will continue to execute the fund’s investment strategy while integrating ADPF assets to drive performance and achieve further economies of scale from a management, sourcing and leasing perspective.” , did he declare.
“The merger will expand Dexus’ fund management business, further diversifying DWPF’s portfolio and investor base, while strengthening the fund’s position as a globally significant diversified real estate fund.”
“AMP Capital has a long history of managing single sector and diversified real estate funds for institutional and direct investors, as well as separate mandates, across the risk spectrum.
Following the vote, AMP Capital Funds Management will cease to act as the responsible entity of ADPF and a transition for unitholders will begin.
The real estate management of industrial properties wholly owned by ADPF, as well as fund and support services, will be transferred over the next few months. AMP Capital will continue to manage the assets held by ADPF which are co-owned with other funds managed by AMP Capital.
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