AMP rings changes

AMP Capital is repositioning its Australian equities business, citing increasing investor demand for income-focused products.

Friday, October 13th 2017, 6:00AM

The decision represents the latest step to modernise AMP Capital’s equities capability globally. During the last 18 months, AMP Capital has established a global equities team and combined its listed real estate and listed infrastructure capabilities to form the global listed real assets team.

AMP Capital will move to a model where its Australian equities fund managers operate in three focused teams leveraging AMP Capital’s capabilities.

These teams will manage products in equity income, small caps and systematic.

AMP Capital will no longer offer benchmark-aware, core Australian equities products.

Global chief investment officer of equities David Allen said: “Australian equities has been and continues to be an important part of AMP Capital’s business and we remain committed to active management.

“It is operating against a backdrop of changing market dynamics, demographics and investor needs. Our research has shown clients increasingly are looking for solutions that can be highly differentiated and cost effective. We expect this trend to continue. We believe demand for benchmark-aware, core Australian equities products is in structural decline over the long term.

“We are always evolving so that we remain relevant in helping clients to meet their investment objectives. The decision to change our Australian equities business is part of a deliberate strategy to set up the business for growth by responding to shifting client needs and industry trends.”

The investment processes for the equity income and small cap strategies will be unchanged. The investment process of internally-managed, ESG screened funds has been strengthened. These low-turnover portfolios are expected to add alpha across the investment cycle by excluding stocks with poor ESG credentials while increasing holdings in those stocks with strong ESG credentials.

Genevieve Murray has been appointed to lead the new team as AMP Capital head of Australian equities and systematic co-portfolio manager.

A number of the current members of the Australian equities team will leave their roles including the current head of Australian fundamental equities, Michael Price.

Allen said: “I’d like to thank Michael Price and the outgoing people for their contribution and commitment to AMP Capital over the years. They leave with our best wishes for the future.

“We are pleased to have attracted a leader of the calibre and experience of Genevieve Murray to AMP Capital and look forward to delivering excellent client outcomes and growth under her leadership.

The new strategy for Australian Equities plays to our strengths and the needs of our clients.

“Demographic shifts towards an ageing population and rising client demand for income mean there is strong demand for equity income products. This is particularly true of offerings like ours, which have a differentiated proposition and are tax efficient.

“We have a strong track record of performance in small caps where there are substantial opportunities to deliver alpha and significant potential for growth due to capacity constraints of funds within this sector.

“Our new approach to managing ESG funds reflects increased demand for products that are aligned with our clients’ values.

“By expanding our Systematic team, we’re also recognising the increasing role of cost-effective capabilities in client portfolios.”

The changes are effective immediately.

Tags: AMP Capital