Challenger shares surge 6pc on strong quarter

The investment management group has posted a 3pc lift in assets and funds under management to $62m.

Challenger CEO Brian Benari. Pic: Renee Nowytarger.

Shares in Challenger have closed more than 6 per cent higher, after the investment management group reported a 3 per cent lift in assets and funds under management to $62 billion.

The company (CGF) said its two funds management units — Fidante Partners and Challenger Investment Partners — achieved net flows of $0.9bn through the September quarter which, combined with a $1.3bn boost from “positive investment markets”, pushed funds under management up $2.2bn to $58.9bn.

The group’s life arm also enjoyed a strong quarter, with annuity sales up 46 per cent on the prior corresponding period to $1.03bn.

“We continue to experience strong demand for our products and have achieved back-to-back quarterly annuity sales in excess of $1 billion,” chief executive Brian Benari said.

“Sales growth is coming via investment administration platforms, due to our expanded distribution relationships, and from broadbased off platform sales via financial advisers.”

Mr Benari added the company had managed to tap into growing interest in broader retirement options.

“Retirees are increasingly seeking longevity protection in the form of annuities to supplement the age pension,” he said.

“Financial advisers are implementing income layering and retirement income model portfolios to meet the needs of these retirees. This is reflected in our record quarter of lifetime annuity sales.”

Challenger reaffirmed its fiscal 2017 forecast for normalised cash operating earnings of $620-$640 million for its Life operation.

At the official market close, Challenger shares had jumped 6.2 per cent to $10.62 apiece, paring gains from an earlier 7.5 per cent rise.