Tell us about yourself, your background and AMP Capital.
AMP is a top-20 listed company in Australia that has been around for over 160 years. It actually built the very first skyscraper in Sydney, Australia and has been investing in real estate for over 50 years. Although it is not particularly well known in the northern hemisphere, it’s got quite a presence in the southern hemisphere and it’s putting itself forward as an Asia Pacific investment house. Real estate has been very important to AMP for the last 50 years, but realistically since its inception.
The decision was made about 12 months ago to internalize what was up until then a joint venture with Brookfield. Basically you had two very large organizations in a joint venture to run listed real estate. So, AMP Capital went through the process of internalizing that capability, which I think for both AMP Capital and Brookfield was really a vote of confidence in the listed real estate space. We see a great future for it and we want to own the success of that product.
I was brought on board as part of that internalization. We hired a couple of additional people in North America but by and large we retained 10 of the 15 staff that were part of the joint venture. We made a few minor refinements to the process but we already had a very good capability in place. We went through that process of change and spent a lot of time with clients and consultants and getting comfortable with the reasons behind it; and today we are looking forward to the future from here.
What is the current size of your portfolio?
We currently manage a little over AU $5 billion, which is about US $5 billion with the current exchange rate. Most of that is global listed real estate, but we also have listed real estate products in Australia and we own some property in Asia.
What about Europe?
Currently we don’t have a solid European product but what we do have is a team of analysts and portfolio managers based in London, specifically looking at Europe as a component of our global market and making recommendations and contributions to the global product from there.
Do you have the intention to do more in Europe?
Very much so. From the retail side, it’s a case of getting a number of the infrastructure pieces in place so things like a UCITS platform. There are a number of clients who we are talking to already in Europe and we have good relationships with many consultants so it’s a case of trying to build our individual presence and profile. That is part of the reason of our presence at European events like EPRA.
We are now looking to raise money in Europe and to invest specifically into Europe. We have a number of very large Asian clients, in particular Japanese and Chinese, who have an interest in the high-yield areas of real estate. Right now Europe offers some of the best yield that you can find globally. So, there is quite a bit of investment demand for trying to pick the right time to have a Europe-only listed real estate product.
So you are open to opportunities to invest or to help your clients invest.
Definitely. In terms of the clients’ side we are doing a lot of work along the lines of when is the right time and what is the right product for Europe-listed real estate capability.
We already have the manpower in place so it’s just a case of finding the right timing. In terms of investment, we currently invest around 15-16% of our portfolio into listed European property companies. The difference is that it’s a portion of the overall global portfolio rather than being a standalone European portfolio.