AMP Capital NZ lifts 2014 income, profit up on sale to parent

AMP Capital Investors (New Zealand), the local funds management arm of Australia's AMP, reported a 6.7% gain in net fee income in 2014, while the sale of a stake in a property management business to its parent generated a jump in profit.

Net fee income rose to $38.3 million in calendar 2014, from $35.9 million in the previous year, the Wellington-based company's annual report shows. The gain came from an increase in total fee income of about 3% to $54.8 million, while management fee expenses fell about 5% to $16.5 million. Profit jumped to $55.7 million, including about $40.3 million from the sale of 50% of property manager AMP Haumi Management, from a profit of $13.3 million in 2013.

AMP Capital has transformed its business in the past year, selling 18 New Zealand properties worth more than $1 billion to Canada's Public Sector Pension Investment Board, in July 2014, and in March this year handed the mandate for some $690 million of active equity funds to Salt Funds Management, closing its own equities operation. It has more than $19 billion of funds under management, putting it second in New Zealand behind ANZ Bank.

"Our business has been through quite a few changes," said Grant Hassell, who was named as managing director of AMP Capital NZ in April. The Haumi business used to have New Zealand directors but now its board is based in Sydney. "It didn't make sense to be on the New Zealand balance sheet," he said.

AMP Haumi is a joint venture between the fund manager and the Abu Dhabi Investment Authority, the investment arm of the emirate's government. Haumi Development Auckland, which owns ADIA's stake in AMP Haumi, owed the fund manager $14,000 at the December 31 balance date, according to its own financial statements, lodged with the Companies Office.

The joint venture's local investments have included the management contract for AMP NZ Office Trust, which has since changed its name to Precinct Properties New Zealand, and an aborted development of the former Lion Nathan brewery site in Auckland's Newmarket.

Hassell described 2014 as "a pretty good year." Most of the firm's revenue comes from the value of funds under management and "our revenue remains strong," he said. "Like every other business out there we're being very conscious of costs."

The current year "is tracking along pretty well, revenue is looking pretty good and cash flow is strong," he said. "As always, we've got an eye on the costs line."

(BusinessDesk)