Challenger Limited’s funds management division saw FUM fall 10 per cent over the quarter to $104.5 billion, with Fidante’s FUM dropping 12 per cent, reflecting a tough market backdrop, according to its third-quarter update.
In an ASX announcement on 21 April, the company said the $11.7 billion decline was driven by net outflows of $8 billion, $3.4 billion in negative investment market movements linked to the war in Iran, and $0.3 billion in client distributions.
“In a period of global volatility and where institutional allocators have continued to reduce exposure to active equity management, we saw funds under management reduce,” managing director and chief executive officer, Nick Hamilton, said.
Fidante’s FUM fell to $86.2 billion, down $11.8 billion or 12 per cent for the quarter, with outflows primarily driven by institutional equity strategies.
By contrast, Challenger Investment Management delivered a 1 per cent lift in FUM, supported by $0.4 billion in net inflows, partially offset by $0.3 billion in negative market movements and client distributions.
Life insurance sales provided a stronger offset, with total life sales rising 19 per cent to $1.7 billion. Lifetime annuity sales increased 18 per cent, while offshore reinsurance annuity sales rose 17 per cent.
Offshore reinsurance growth was underpinned by strong demand for yen-denominated annuities.
Annuity net flows came in at $274 million, with book growth of 1.7 per cent for the quarter, supported by higher sales and a moderating maturity rate.
Overall annuity sales rose 10 per cent to $1.1 billion, driven by strength in both domestic and offshore reinsurance channels. Domestic annuity sales increased 7 per cent to $806 million.
“Sales across domestic lifetime annuities and Japanese annuities remained strong, supported by demand for guaranteed income solutions and the ageing populations both in Australia and Japan,” Hamilton said.
Challenger Index Plus sales climbed 41 per cent to $629 million, boosted by new client demand during the quarter.
Closing investment assets were $26.3 billion. The company also tightened FY26 normalised basic EPS guidance to between 66 and 70 cents per share.
Hamilton said Challenger continued to build momentum in its retirement strategy through new partnerships with super funds, wealth managers and platforms.
“In the quarter, we established a partnership with BT to provide fully integrated retirement income solutions through their BT Panorama wealth management platform. In partnership with Iress, advisers can now design retirement plans in Xplan that integrate account-based pensions with guaranteed and market linked lifetime income products.”
Hamilton said the business had maintained strong momentum through the quarter, driven by growth in lifetime sales, expanded customer reach, and continued execution of its retirement income strategy.
