Challenger’s FUM down 3% in September

Oksana Patron

21 October 2022

Challenger has recorded a 3% decrease ($2.4 billion) in funds under management (FUM) to $91 billion which was driven by Fidante.

Fidante’s FUM, which stood at $70 billion at the end of the September quarter, represented a 3% decline quarter on quarter and was driven by net outflows of $1.7 billion for the quarter, distribution of $1.1 billion, which were partially offset by positive investment market movements of $0.3 billion.

At the same time, net outflows reflected redemptions across fixed income managers ($2.3 billion), which were partially offset by net inflows across equity and alternative strategies ($0.6 billion).

The firm also said that flows across the funds management sector during the quarter continued to be impacted by market volatility.

Challenger Investment Management FUM stood at $21.1 billion, which was up $60 million for the quarter, and the group assets under management (AUM) fell 2% for the quarter to $96 billion.

The total Life sales was up 33% to $2.8 billion at the end of September while Life book grew 2.3% for the quarter.

Challenger’s managing director and chief executive, Nick Hamilton, said that annuity sales benefitted from the interest rate environment, which improved the customer proposition, with its three-year annuity rate having reached 4.85% in October and was helped by advisers and new customers.

“Challenger started FY23 strongly, with annuity sales momentum continuing following the strong finish to last financial year,” Hamilton said.

“Pleasingly, the higher interest rate environment is providing us the opportunity to remix our sales. Annuity sales greater than two years, including lifetime sales, are increasing, reflecting our focus on growing longer duration business.”

Challenger also completed the strategic review of the bank announced in August 2022, which concluded a sale was the best option.