AMP Limited has announced the completion of its million dollar capital raising program that will help fund its new strategy.
On Thursday 8 August, AMP announced it was seeking a $650 million capital raise to help the wealth giant to fund its three-year transformational strategy.
Less than 24 hours later AMP announced it had completed the institutional placement with approximately 406.3 million new fully paid shares to be issues to new and existing institutional investors.
AMP’s chief executive Francesco De Ferrari said he was pleased with the support AMP had received from investors that would allow it to undertaken the strategy.
“The funds raised will allow us to immediately implement our transformational strategy to create a
simpler, higher-growth and higher-return AMP that’s focused on customers,” he said.
The capital raise, along with the funds raised from the sale of the AMP Life, will finance the ambitious program launched by Mr De Ferrari.
“The strategy we’re launching today repositions AMP for the future, there’s a strong need for what we offer across all of our spectrum. And we have the business model to capitalise on the significant industry disruption that’s occurring,” he said.
However, the plan to reinvent its wealth management business has been met with anger and frustration by financial advisers.
AMP said it would shift focus to direct-to-client channels and digital solutions and the bank would reshape aligned advice by using “fewer, more productive advisers”.
One of the biggest shocks to advisers however was the announcement that AMP would no longer buy back financial advice books for four time earnings, instead reducing it to 2.5 times.
"We are all running businesses. As the CEO of a public company I would find it difficult to explain to shareholders how to justify buying something that is worth 2.5 times at four times," said Mr De Ferrari.
More news and impact to advisers is expected to come as the company begins its transformation.