AXA Asia Pacific Holdings Links with Deutsche AM
AXA Asia Pacific Holdings Links with Deutsche Asset Management in Property Funds Management
Melbourne, Australia, May 31, /MediaNet International-AsiaNet/ - AXA Asia Pacific Holdings Limited (AXA) today announced that it had entered into a binding agreement with Deutsche Asset Management Limited to merge their direct property funds management businesses, subject only to approval by the Foreign Investments Review Board. Under this transaction:
AXA will sell its wholly owned subsidiary, AXA Australia Property Management Limited, the Responsible Entity for the listed AXA Australia Diversified Property Trust and the unlisted NMFM Property Fund, to Deutsche Asset Management.
AXA has entered into agreements with Deutsche Asset Management under which Deutsche Asset Management will provide AXA with direct property management services for AXA property portfolios in Australia and New Zealand.
AXA and Deutsche Asset Management will jointly investigate opportunities to distribute direct property backed products through AXA's retail distribution network.
At this stage the terms of the transaction are confidential. However the consideration is not material in the context of AXA's overall business.
On completion of the transaction investors in AXP and the NMFM Property Fund will benefit, through the scale economies enjoyed by a large property manager such as Deutsche Asset Management, from lower management fees.
Commenting on the transaction, AXA Asia Pacific Group Chief Executive Les Owen, said, "Property funds management is a highly specialised business. There is increasing pressure for rationalisation in the sector, demanding both scale and proven capability to remain competitive. On its own AXA in Australia and New Zealand is unlikely to have the scale to be a leader in the direct management of property.
"Upon completion of the transaction Deutsche Asset Management will be one of the largest property managers in Australia with more than $9 billion in property assets under management, including three Listed Property Trusts. Globally, Deutsche Asset Management has more than $40 billion in property under management, employs 400 property professionals and is a major global provider of first class property funds management services to a range of clients across 19 countries covering the Americas, Europe and Asia.
"In addition, Deutsche Asset Management is able to access the services, products and people within the Deutsche Bank Group covering areas such as structuring, investment banking and advisory, underwriting, lending, money markets and research support."
This transaction follows on the heels of the Alliance Capital Joint Venture, announced before Christmas last year.
According to Les Owen, "This transaction is consistent with our strategy to focus as a manufacturer on what we can be world class at. In the case of quoted securities the joint venture with Alliance Capital, a member of the global AXA Group, provides world class capability. In the case of direct property management the relationship with Deutsche Asset Management will allow AXA to continue to offer investors access to proven excellence in property management.
"AXA Australia intends to retain its exposure to the AXA Australia Diversified Property Trust (AXP), with Deutsche Asset Management having an option for a period of 12 months to acquire up to 19.9 per cent, of AXA's existing holding of 26 per cent, and to the NMFM Property Fund. AXP will continue as a diversified listed property trust while the NMFM Property Fund will continue as a wholesale fund under the management of Deutsche Asset Management.
"Investors in AXP and the NMFM Property Fund can expect a smooth transition to Deutsche Asset Management as AXA Australia Property Management Limited's operations will be transferred with minimal disruption. Recognising the quality and depth of experience within the AXA property team, Deutsche Asset Management is looking to retain key staff, ensuring continuity in the ongoing operations of the business.
"The proceeds received by AXA from this transaction will be used to fund organic growth initiatives in AXA's core business activities of wealth accumulation and financial protection."