SYDNEY, AAP – Financial services giant AMP has agreed to sell AMP Capital’s infrastructure debt division to US-based asset manager Ares Management ahead of the demerger of the group’s business.

The infrastructure debt unit will be sold for a total cash consideration of $428 million, with proceeds from the sale to be used for strengthening the group’s capital position.

AMP last month detailed its plan to demerge its AMP Capital private markets business, under which AMP said it will operate as a retail wealth manager in Australia and New Zealand, while the new entity, named PrivateMarketsCo, will expand presence in the global infrastructure and real estate market.

The demerger is to be completed in the first half of 2022.

The latest deal follows PrivateMarketsCo’s strategic decision to focus on managing equity investments in real estate and infrastructure, while also simplifying its structure, the company said.

“PrivateMarketsCo and AMP will realise significant value from the divestment,” the new entity’s head, Shawn Johnson, said.

“This will provide a strong revenue stream in coming years as we demerge PrivateMarketsCo and accelerate the momentum in our business.”

By 1100 AEDT, AMP shares were up 4.5 per cent at $98.25 in a firm Australian market.