AMP looks to serve retirement market
The demerger of AMP Limited and AMP Capital’s private markets business will allow AMP Limited to explore new opportunities, including retirement, and drive growth in the banking and wealth platforms.
AMP said the demerger in the first half of 2022 would enable the two businesses to increase focus on their respective markets and growth opportunities.
AMP chief executive, Alexis George, said: “The two largest assets held by Australians and New Zealanders are their home and super – those are the needs that AMP serves.
“AMP has been rapidly transformed over the past three years. We are no longer a life insurer. In wealth management we have shifted from a vertically integrated proposition to a contemporary, customer-led service provider. We have invested in our bank to be able to grow in a deep and competitive market.
“We see a significant gap in the market in retirement and have strong capability within our business to better serve this market. We also believe we can further scale our business by taking our products direct to clients.”
The bank said the demerger would allow AMP Limited to:
- Renew purpose and values to put the customer at the centre, and continue to drive culture transformation;
- Reposition core capabilities to drive growth in banking and wealth platforms;
- Deliver stable earnings in the Master Trust and New Zealand wealth management businesses, and accelerating the transformation of advice;
- Simplify the business to drive efficiency and agility, including delivering on the FY19 to FY22 $300 million cost reduction program and committing to a further $115 million of cost reduction initiatives from FY22 through to FY24; and
- Explore new opportunities, including in retirement and in direct-to-consumer solutions, as well as in new business adjacencies.
The private markets business chief executive, Shawn Johnson, said: “Our team has built a strong track record in infrastructure and real estate – and has the capability to expand into new adjacencies and pursue further global growth opportunities, supported by increasing demand for private markets assets from investors around the world.
“We have a clear strategy to separate, simplify and broaden our client base and diversify our investment capabilities. We will continue to play a leading role in infrastructure and real estate investments around the world as an independent company.”
The bank said the demerger would allow the private markets business to:
- Deliver autonomy through an effective separation and demerger from AMP;
- Simplifying the business and organisation structure and achieving a run-rate cost base of $300 million by FY23;
- Growing its client base, led by a newly established global client solutions team and scaling its existing infrastructure and real estate investment strategies; and
- Diversifying its product offering to clients, including potential new investment strategies structured to meet client specific interests globally.
Recommended for you
The structural shift towards active ETFs will reshape the asset management industry, according to McKinsey, and financial advisers will be a key group for managers to focus their distribution.
ASIC has warned that practices across the $200 billion private credit market are inconsistent and, in some cases, require serious improvement.
A surge in electricity prices has driven the monthly Consumer Price Index to its highest level in a year, exceeding forecasts.
Infrastructure well-positioned to hedge against global uncertainty, says investment chief.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Loftus Peak Global Disruption Fund Hedged
118.15 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
75.00 3 y p.a(%)
3
DomaCom DFS Mortgage
67.30 3 y p.a(%)
4
UBS Solactive Global Pure Gold Miners UCITS ETF Dis USD
61.11 3 y p.a(%)
5
Global X Ultra Long Nasdaq 100 Complex ETF
60.93 3 y p.a(%)
