Challenger operates two core investment businesses, a fiduciary Funds Management division and an APRA-regulated Life division. Challenger Life Company Limited (Challenger Life) is Australia’s largest provider of annuities.
CGF shares took a nosedive in April 2021. Since then, the CGF share price has been largely trending sideways. The investor day did peak some interest in the stock as Challenger reaffirmed its FY21 profit guidance and provided an update on its strategy and outlook for the financial year ahead. The CEO mentioned CGF expects FY21 normalised net profit before tax to be at the bottom end of its guidance range of between $390 million and $440 million.He said Challenger was expecting to achieve strong profit growth in FY22 with a guidance range for normalised net profit before tax of between $430 million and $480 million.
This morning, CGF shares were one of the top performers among the ASX 200.
Challenger announced today that Athene, a leading retirement services company and their strategic partner Apollo Global Management are investing to take up 15% interest in CGF.
Athene, through its subsidiaries, is a leading retirement services company with total assets of US$205.7 billion as of March 31, 2021 and operations in the United States, Bermuda, and Canada. Apollo is a high-growth, global alternative asset manager with over US$461 billion in Assets Under Management. The acquisition of the 15% equity interest in CGF will result in a total expected minority economic interest of 18% in Challenger for approximately A$720 million(or US$540 million).
Challenger’s Managing Director and Chief Executive Officer, Richard Howes said: “Today’s announcement by Athene is a strong endorsement of Challenger’s market position and long-term growth prospects from a leading international retirement services provider. We look forward to working with Athene and Apollo as we continue to pursue our shared purpose of providing customers financial security for a better retirement.”
The announcement certainly caught markets off guard. However, the reaction has been extremely positive with CGF shares closing at $5.95 a share – rising 8.78%.
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