The AMP Ltd (ASX: AMP) share price is in the green this morning after the financial services company confirmed it will keep hold of its $7 billion office fund.
After hearing advice from an independent advisory committee and legal and financial advisers, the trustee board of AMP Capital Wholesale Office Fund (AWOF) decided the embattled company can keep the fund’s reins.
At the time of writing, the AMP share price is $1.155, 1.76% higher than its previous close.
Let’s take a closer look at today’s announcement from AMP.
AMP share price up on AWOF win
After a long battle, it has been decided that AMP will continue its management of AWOF, albeit upon implementing multiple changes.
Under the ruling, AMP must make changes to the fund’s governance, increase its manager alignment, and reduce its fee arrangements.
Despite the adjustments, the findings are a significant win for AMP Capital. Keeping AWOF on its books likely sees it in a stronger position ahead of its planned demerger of AMP Capital’s Private Markets.
AMP Capital has also committed to put up to $500 million of alignment capital towards supporting AWOF and its other real estate funds.
Both groups’ share prices are relatively flat today. GTP is 0.1% lower and Mirvac shares are unchanged from Friday’s closing price. However, they’re marginally better than the broader market. The S&P/ASX 200 Index (ASX: XJO) is currently down 0.52%.
Right now, the AMP share price is just 0.85% lower than it was this time last month. However, it’s still 25% lower than it was at the start of 2021.
What did management say?
AMP Capital CEO Shawn Johnson commented on the trustee board’s findings, saying:
Our strong track record, as well as the recent $2.2 billion Pacific Fair and Macquarie Centre transaction – the largest of its type in Australian history – demonstrates our capability to continue delivering for our investors in real estate.
This decision recognises the commitment of our real estate team, who deliver every day for AWOF unitholders, and follows a comprehensive and detailed review against our peers.