Challenger Financial Services Group (Challenger) will be developing its product distribution overseas, despite warning the market that 2009 earnings will be affected by market uncertainty.
“While we expect earnings in the year ahead to continue to be affected… we see growth opportunities internationally,” Challenger chief executive Dominic Stevens said in a shareholder update yesterday.
“Development of product for distribution internationally, via our global partners, will be a focus for the upcoming period.
“We anticipate this initiative will deliver significant growth over the mid-term – building funds under management and associated recurring fee revenue.”
The group announced in August that it had purchased a 30 per cent stake in an unnamed fixed-interest boutique, and a 27.5 per cent holding in hedge fund manager WaveStone Capital.
Challenger also has long-term strategic relationships with Bank of Tokyo-Mitsubishi UFJ, Mitsubishi UFJ Securities and Colony Capital LLC.
“While there is no doubt that 2009 will bring more challenges from the external environment, I am convinced that each of our businesses is on a solid footing and that our strong capital position and financial flexibility have us well-positioned to manage,” Stevens said.
Challenger’s funds under management (FUM) dropped 12 per cent to $13.1 billion in the September quarter, the group reported in a separate statement to the market yesterday.
Challenger’s retail funds experienced outflows of $281 million, while institutional outflows totalled $540 million in the quarter.
The firm’s shares gained 3.4 per cent to $2.12 in trading yesterday.
