CHALLENGER INFRASTRUCTURE FUND 
By MARKET RELEASE
ASSETS AND FUNDS UNDER MANAGEMENT 30 SEPTEMBER 2012 AND REGULATORY CAPITAL UPDATE 18 October 2012, Sydney - Challenger Limited (ASX:CGF) today announced that its total assets and funds under management (AUM) as at 30 September 2012 was $35.2 billion, an increase of
28% over the last 12 months and 5% over the quarter.
CEO Brian Benari said: "We're fortunate to be growing both
our Life and Funds Management businesses and can confirm that
we're on track to meet our 2013 retail annuity sales growth
target of 15%, or $2.25 billion, as well as net book growth
of 10%.
"Importantly, we are successfully extending the average tenor
of retail annuity sales, which for the September quarter was
6.1 years, up from 5.1 years a year ago and 4.4 years two
years ago. A lengthening of tenor increases the future rate
of net book growth, enables greater investment in
longer-dated assets which earn an illiquidity premium, and is
more efficient in terms of distribution and
administration.
"We also continue to attract strong inflows into our boutique
funds management business Fidante Partners. Investors are
responding strongly to the close alignment delivered by our
model, as reflected in the 46% increase in FUM over the past
12 months", said Mr Benari.
Life's AUM was $10.2 billion as at 30 September 2012,
representing growth of 16% over 12 months and 4% over the
quarter.
Challenger Life annuity sales at $558 million for the quarter
were in line with the September 2011 quarter and comprised
$481 million of retail sales and $77 million of institutional
products.
Chantal Travers, Senior Manager Investor Relations, Challenger Limited 02 9994 7560
Stuart Barton, General Manager Corporate Marketing and Communications, Challenger Limited, 02 9994 7008
Challenger Limited A.B.N 85 106 842 371
Disclaimer: The forward looking statements, estimates and projections contained in this release are not representations as to future performance and nothing in this release should be relied upon as guarantees or representations of future performance.
Funds Management
Funds Management's funds under management (FUM) for the
September 2012 quarter was $32.6 billion, up 27% over 12
months and 5% over the quarter, due to more buoyant
investment markets and positive Fidante Partners net flows.
Total Funds Management net flows were $438 million for the
quarter.
Fidante Partners FUM reached $20.9 billion, an increase of
46% over 12 months and 9% over the quarter. Net flows for the
quarter were $633 million, comprising $116 million in Equity
products and
$517 million in Fixed Income products.
Aligned Investments FUM decreased by 1% in the quarter to
$11.7 billion, with net outflows of
$195 million due principally to a reduction in institutional
infrastructure mandates.
The Australian Prudential Regulation Authority (APRA)
publically released its new capital standards for all life
and general insurers on 10 October 2012. The standards have
now been finalised, will be effective from 1 January 2013 and
have been designed to ensure that all insurers can absorb one
in 200 year adverse shocks and continue to be able to meet
their obligations to policyholders.
There is no material change to the expected increase in
Challenger Life Company's regulatory capital requirement of
between $110 million and $125 million per annum for three
years, with the first increase effective from 1 January 2014.
Challenger's current excess capital position and ongoing
organic capital generation is expected to be sufficient to
meet the additional capital requirements while maintaining
the company's existing dividend policy.
Challenger announced APRA's proposed LAGIC transition
arrangements on 16 August 2012 and expects to receive final
confirmation from APRA in coming weeks.
ENDS
Further enquiry: Stuart Kingham, Head of Investor Relations, Challenger Limited, 02 9994 7125Chantal Travers, Senior Manager Investor Relations, Challenger Limited 02 9994 7560
Stuart Barton, General Manager, Corporate Marketing and Communications, Challenger Limited, 02 9994 7008
Challenger Limited A.B.N 85 106 842 371
Disclaimer: The forward looking statements, estimates and projections contained in this release are not representations as to future performance and nothing in this release should be relied upon as guarantees or representations of future performance.
Assets and Funds Under Management
$m | Q1 13 | Q4 12 Q3 12 Q2 12 Q1 12 |
Total Assets and Funds Under Management | 35,227 | 33,429 31,412 29,567 27,579 |
Represented by: Funds Management Fidante Partners1 Equities Fixed income | 9,695 11,226 | 8,879 8,262 7,549 6,700 10,372 9,507 8,695 7,596 |
Total Fidante Partners | 20,921 | 19,251 17,769 16,244 14,296 |
Aligned Investments2 Infrastructure Institutional mandates Challenger Infrastructure Fund (ASX:CIF) (adjusted equity value) Property Institutional mandates Challenger Diversified Property Group (ASX:CDI) (gross assets) Fixed income3 | 885 430 1,845 888 7,637 | 1,136 1,105 1,100 1,101 410 367 352 327 1,835 1,736 1,757 1,751 869 884 871 873 7,516 7,528 7,397 7,425 |
Total Aligned Investments funds | 11,685 | 11,766 11,620 11,477 11,477 |
Total funds under management | 32,606 | 31,017 29,389 27,721 25,773 |
Average Fidante Partners Average Aligned Investments | 20,364 11,838 | 18,426 17,026 15,399 14,614 11,708 11,491 11,443 10,714 |
Average total funds under management4 | 32,202 | 30,134 28,517 26,842 25,328 |
Life Fixed income and cash Property5 Infrastructure6 Equity and other | 7,891 1,484 623 170 | 7,388 7,046 6,369 6,430 1,539 1,533 1,552 1,565 618 571 569 509 228 230 219 243 |
Total Life investment assets | 10,168 | 9,773 9,380 8,709 8,747 |
Average Life investment assets4 | 9,908 | 9,637 9,013 8,670 8,513 |
2%
6%
14%
Q4 122%
6%
16%
Q3 123%
6%
16%
Q2 122%
7%
18%
Q1 123%
6%
18%
78%
76%
75%
73%
73%
Property
Fixed income and cash
Infrastructure assets
Equity and other assets
1 Fidante Partners comprise 11 co-owned, separately branded boutique active investment managers from which Fidante receives distribution and administration fees. Fidante Partners also shares in the profits from these businesses.
2 Aligned Investments develops and manages products under Challenger's brand for the Life business and third party institutional investors.
3 Fixed income includes mortgages.
4 Average funds under management and investment assets are calculated on a monthly basis.
5 Property is reported at Q1 2013 net of senior debt of $665m (Q4 2012 $663m). Property includes direct and indirect holdings.
6 Infrastructure is reported at Q1 2013 net of debt of $206m (Q4 2012 $206m).
Analysis of flows | Q1 13 | Q4 12 Q3 12 Q2 12 Q1 12 |
Funds Management net flows Fidante Partners Aligned Investments | 633 (195) | 1,858 614 1,650 336 2 31 11 (276) |
Net flows | 438 | 1,860 645 1,661 60 |
Life sales Retail Institutional | 481 77 | 607 364 475 509 - 415 239 49 |
Sales | 558 | 607 779 714 558 |
Reconciliation of Total Group Assets and Funds Under Management Funds Management (FUM) Life investment assets Adjustments to remove double counting of cross holdings: Life Company investment in CDI and CIF Life Company investment in fixed income, property and infrastructure1 | 32,606 10,168 (496) (7,051) | 31,017 29,389 27,721 25,773 9,773 9,380 8,709 8,747 (488) (460) (451) (439) (6,873) (6,897) (6,412) (6,502) |
Total Assets and Funds Under Management | 35,227 | 33,429 31,412 29,567 27,579 |
1 Fixed income includes mortgages.
|
distributed by
|
