Some ob­servers watch­ing the bloody Hayne show yes­ter­day might be won­der­ing: Who would want to run AMP any­way?


Com­mon­wealth Bank will float its global as­set man­age­ment arm on the lo­cal stock ex­change, which is likely to re­sult in the year’s largest ini­tial pub­lic of­fer­ing with an es­ti­mated value of al­most $5 bil­lion.

Colo­nial First State Global As­set Man­age­ment, known out­side the coun­try as First State In­vest­ments, would be listed on the ASX by the end of the year, the bank said in a state­ment.

For­mer Sun­corp-Met­way chief ex­ec­u­tive John Mulc­ahy will be ap­pointed chair­man of the group once it was spun off from the bank. Mark Lazberger will con­tinue as chief ex­ec­u­tive.

CFSGAM has $219bn worth of as­sets un­der its con­trol. Its funds man­age­ment in­come for the 2017 fi­nan­cial year was $837 mil­lion, down on the pre­vi­ous year.

There is an ex­pec­ta­tion that a re­tail of­fer any­where be­tween $1bn and $1.5bn would form the ba­sis of any IPO. The list­ing will be by far the largest this year.

Other deals loom­ing in­clude an IPO of the $4bn Quad­rant En­ergy and the con­sumer fi­nance oper­a­tion Lat­i­tude, owned by pri­vate eq­uity firms Kohlberg Kravis Roberts and Varde Part­ners, along with Deutsche.

CBA had put up the divi­sion for re­view af­ter the sale of its life in­sur­ance arm Com­mIn­sure to Hong Kong’s AIA Group for $3.8bn. As pres­sure in­creases on the bank­ing sec­tor — from share­hold­ers, politi­cians and con­sumers — to re­form the out­dated ¢ ver­ti­cally-in­te­grated struc­ture, the float of CFSGAM has CBA fo­cused on back-to-ba­sics bank­ing.

“We ex­am­ined long-term Com­mon­wealth Bank share­holder value and also con­sid­ered the abil­ity of CFSGAM to serve the in­ter­ests of its clients, at­tract and re­tain key per­son­nel and bet­ter grow its busi­ness,” he said.

“While CFSGAM has achieved sig­nif­i­cant growth, scale and di­ver­si­fi­ca­tion un­der the cur­rent own­er­ship struc­ture, the strate­gic re­view deter­mined that an in­de­pen­dent own­er­ship model would pro­vide greater ben­e­fits.”

The float will be sub­ject to mar­ket con­di­tions and reg­u­la­tory ap­proval. Other di­rec­tors on the CFSGAM board will be for­mer chair­man of Com­mon­wealth Su­per­an­nu­a­tion Cor­po­ra­tion Su­san Doyle, Ernst & Young ex­ec­u­tive James Mil­lar, for­mer Mac­quarie ex­ec­u­tive Gail

Pem­ber­ton and for­mer Fidelity boss Richard Wast­coat.

An­a­lysts say a large por­tion of the value in CFSGAM is re­tain­ing the fund man­agers and star stock pick­ers to gen­er­ate the re­turns the as­set man­ager and its in­vestors have be­come used to.

It is the lat­est in a string of moves by Aus­tralia’s largest banks to strip them­selves of prob­lem­atic or un­der­per­form­ing busi­nesses, in a bid to re­fo­cus on home loans and de­posits, which are tra­di­tion­ally more prof­itable.

ANZ has its wealth arm OnePath up for sale, while Na­tional Aus­tralia Bank re­cently sold 80 per cent of its life in­sur­ance busi­ness. West­pac, which launched a par­tial list­ing of its BT In­vest­ment Man­age­ment in 2007, re­cently said it would sell down its re­main­ing stake.

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