Challenger has announced it will sell its Australian real estate business, Challenger Real Estate (CRE), to Elanor Investors Group for $42 million.
This consideration will be received in new securities issued by Elanor and will give Challenger an 18 per cent interest in the group once the transaction has been completed.
In a statement to the ASX on Thursday, Challenger explained that the sale was part of an agreement it had entered into with Elanor to form a strategic real estate partnership.
This will include an exclusive distribution arrangement, under which Challenger’s multi-affiliate business Fidante will distribute Elanor’s existing and new funds, and Elanor will become Challenger’s commercial real estate partner in Australia and New Zealand.
“The combination of Challenger’s real estate platform with Elanor will provide a significant uplift in capability and scale,” said Challenger managing director and chief executive officer Nick Hamilton.
“Elanor’s track record in originating high-quality real estate opportunities, combined with Fidante’s award-winning distribution capability, will allow us to meet more customer needs.”
According to Challenger, the transaction will support its strategy to expand its funds management offering by leveraging Fidante’s distribution capability combined with Elanor’s real estate platform to create a new Fidante affiliate manager.
The firm suggested that this move would result in a very compelling proposition for retail, high-net-worth and institutional customers.
“Challenger will benefit from both alignment and access to growth via the acquisition of a strategic stake in Elanor, and we are excited to continue to grow the real estate platform together with the Elanor team,” Mr Hamilton added.
Challenger indicated that it intends to be a long-term Elanor securityholder and pledged to work with the group’s management to support the growth of the business. This will include a Challenger representative being added to the board of Elanor.
“We are pleased to have executed on a key strategic objective of the group to grow AUM through the acquisition of a significant real estate funds management platform,” said Elanor CEO Glenn Willis.
“This is a transformational transaction for Elanor. Combining Elanor’s real estate funds management capability with Challenger’s market-leading capital raising platform delivers significant size and scale benefits and positions us for further strong growth.”
The transaction remains subject to Elanor securityholder approval as well as other regulatory approvals and is expected to complete 30 June 2023.
