The AMP Ltd (ASX: AMP) share price is close to hitting a record low on the back of a soft quarter for March 2021. Now with the spin-off of AMP Capital’s private markets business, will the AMP share price get any lower?
AMP share price
AMP partially divests its private markets arm
AMP Limited intends to carry out a demerger of AMP Capital’s private markets business (Private Markets). But not completely as AMP will still retain a minority stake in Private Markets of up to 20%.
The primary focus now is on its retail-focused, wealth management and financial advice services.
Private markets is a global private markets investment manager that invests in asset classes like infrastructure equity, infrastructure debt and real estate.
This separation has resulted in the departure of AMP Capital’s Global Head of Infrastructure Equity and North West Region, Boe Pahari.
Under the proposed demerger, Private Markets is expected to be listed on the ASX.
What now for AMP?
It’s interesting that management noted the proposed demerger would unlock further value in the Private Markets business by enabling it to establish a new brand.
To me, it sounds like the Private Markets business may have suffered as a result of the diminishing AMP brand.
I think the AMP brand is continuing to lose its gloss, which was one of its core competitive advantages.
Whilst it is encouraging to see AMP trying to focus on its core business, this demerger will make it extremely difficult to reach its former heights.
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