Challenger Investment Management (Challenger IM) has announced plans to launch a listed unsecured investment structure, Challenger IM LiFTS 1 Notes (Challenger IM LiFTS), which will be quoted on the ASX.
The launch marks a strategic expansion for the firm, aiming to broaden access to income-generating investments and boost its standing in the listed-debt market.
It also signals the beginning of a new issuance program, established to address the increasing demand for private credit exposure through a more accessible structure.
Challenger IM LiFTS will offer Australian investors a fixed-term investment of seven years, providing monthly interest payments derived from a managed and diversified portfolio of over 100 credit exposures across both public and private markets.
The note’s annual interest rate is 1M BBSW + 2.75 per cent, which includes a first loss buffer to enhance credit for noteholders.
With over $16 billion in fixed-income assets under management, Challenger IM is one of Australia’s most seasoned credit managers.
Commenting on the launch, chief executive of funds management Victor Rodriguez said it aligns with the investment management firm’s long-term growth plans.
“This is a strategic milestone for Challenger, and we’re thrilled to launch this innovative, first-of-its-kind note structure to the Australian market,” he said.
Building on 20 years of experience across public and private credit investments, Rodriguez said the addition reflects the firm’s commitment to providing institutional-grade, income-focused solutions in the listed retail space.
“With the growing demand for private credit, Challenger IM LiFTS aims to provide access to this asset class via an ASX-listed fixed term debt security,” he said.
According to Rodriguez, the firm had already secured cornerstone commitments of $100 million in under 24 hours from its opening.
The launch announcement comes as other fund managers are increasingly breaking into the private credit market.
The latest of which, Betashares, recently confirmed the launch of its private capital division in partnership with its first US-based fund manager and investment adviser, Cliffwater LLC.
Commenting on the launch, Betashares founder and CEO Alex Vynokur said the Australian market has long lacked access to high-quality global private asset options.
“Despite the increased demand for private assets, Australia remains relatively underserved by high-quality, global investment options,” he said.
According to the ETF provider, the new division – titled Betashares Private Capital – is aimed at offering institutional-grade private market investment solutions to Australian wholesale advisors, financial advisers and their clients.
Its first private credit fund offering is expected to launch later this month, providing AUD-hedged exposure to Cliffwater’s largest private credit fund – Corporate Lending Fund Platform – which focuses on direct loans to US middle market companies.
Vynokur added that the offering would fill a significant market gap, a need that Challenger has also recognised.
“We believe there is a real opportunity to address this gap, and with that enable Australian investors and their financial advisers to have the opportunity to improve risk adjusted returns in portfolios by including robust, diversified private asset investments,” he said.
