Challenger Announces First Quarter Performance

Challenger Limited (ASX:CGF) today reported a significant increase in assets under management, driven by strong results in both Life and Funds Management in the September quarter.

Challenger’s total group assets under management was $73.5 billion at 30 September 2017, up 5% in the quarter.

Funds Management achieved strong positive flows across both Fidante Partners and Challenger Investment Partners of $3.8 billion for the quarter. Fidante Partners’ funds under management (FUM) increased by $2.7 billion (5%) to $53.7 billion.

Total Life net book growth was $523 million for the quarter, up 57% on the prior corresponding period (pcp). Based on opening FY18 liabilities1 , Life net book growth for the quarter was 4.4%, compared to 3.1% in the pcp.

Total Life sales for the quarter were $1,570 million, up 45% on the pcp. Total Life sales comprised annuity sales of $1,097 million and Other Life sales of $473 million.

Annuity sales increased by 6% on the pcp and were up 17% on the June 2017 quarter. Longterm sales, being lifetime annuities and 20-year maturity MS Primary (Japanese) business, accounted for 38% of the September 2017 quarter sales, up from 29% in the pcp.

Challenger Chief Executive Officer Brian Benari said: “Challenger continues to demonstrate the strength of its Funds Management model. In the last three months alone we have increased funds under management by $4 billion, positioning us as one of the country’s fastest growing asset managers.

“In our Life business, we’ve continued to focus on driving sustainable book growth with strong sales of long-term annuities, underpinning future performance. We will realise the benefits of this strategy as scheduled maturities continue to fall through 2018 and beyond.

“Our relationship with MS Primary in Japan continues to deliver strong results, materially contributing to our long-term sales for the quarter.

“We’ve also continued to expand our distribution reach in Australia, going live with our AMP platform arrangements in the quarter, which makes it easier for advisers to include annuities in clients’ portfolios. This is supported by AMP’s model portfolio allocation of 25% to a lifetime annuity.”

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