AMP Limited and Ares Management entered into a non-binding heads of agreement to pursue a joint venture for AMP Capital’s private markets businesses of infrastructure equity and infrastructure debt, real estate and other minority investments.

Under the proposed transaction, Ares would acquire 60% of the private markets businesses and assume management control, with AMP retaining 40%. AMP and Ares will enter into a 30-day period of exclusivity to work toward a binding transaction.

Ares, with a current market capitalization of more than $13 billion, has a global footprint and capabilities in credit, private equity and real estate.

Key components of the proposed joint venture can be found here.

If agreed, the transaction will be subject to regulatory approvals, an independent expert’s report, approval by AMP’s shareholders and other customary conditions precedent, including change of control approvals. AMP shareholders do not need to take any action at this stage. The proposed transaction will mark the conclusion of AMP’s portfolio review.

“We believe the proposed partnership with Ares would deliver strong outcomes for our clients, our shareholders and our broader business. We expect it would strengthen the business and significantly accelerate our strategy to grow private markets while de-risking our international expansion plans and bringing forward the value in AMP Capital for our shareholders. The joint venture would also enable AMP shareholders to participate in anticipated accelerated growth from a business with increased global scale and capability,” Debra Hazelton, chair of AMP, said.

“The transaction will enable AMP to increase focus on the transformation of our wealth management business in Australia, drive the continued growth of AMP Bank and New Zealand wealth management and benefit from driving further efficiency. We look forward to working toward a binding agreement with Ares, which will mark the conclusion of the portfolio review,” Francesco De Ferrari, chief executive at AMP, said.

“We are excited to further expand our real estate and infrastructure investment capabilities through our partnership with AMP. We believe we can add significant value through our global scale, relationship network, investor relationships and our broad, collaborative investment platform. We’ve been impressed by the growth of AMP Capital’s private markets business over the past several years and our time with the team as part of the portfolio review has further cemented our view on the intrinsic value of this business under our leadership. We expect that this transaction would be highly strategic and complementary to our business and financially accretive for our shareholders,” Michael Arougheti, chief executive of Ares, said. 

Founded in 1849, AMP is a wealth management company offering clients financial advice and superannuation, retirement income, banking and investment products.

Ares Management is a global alternative investment manager operating integrated investment groups that invest across the credit, private equity and real estate markets.