Athene, Apollo make Australian market entry with $540m swoop on Challenger

Bermuda-domiciled  Athene Holding and private-equity firm  Apollo Global Management have acquired up to 18 percent stake in Australian investment management firm Challenger for approximately A$720 million ($540 million).

The two companies will take a 15 percent stake in Challenger from an existing shareholder, with the remaining 3 percent subject to customary Australian Prudential Regulation Authority approval.

Athene and Apollo see "attractive long-term opportunities" in partnering with Challenger as it looks to enter the Australian retirement market.

Athene said it shares the same mission with Challenger: providing customers with financial security for retirement. Challenger provides annuities and investment management in Australia, with A$21 billion of life investment assets and A$104 billion of total assets under management as of March 31, 2021.

The investment follows Athene's pending agreement to merge with Apollo, combining the two companies to create a leading global solutions provider focused on delivering superior investment returns and retirement income. Entering the Australian market through this investment in Challenger is a natural extension of that vision, it said, and follows other new business initiatives Athene has undertaken in the United Kingdom and Japan over the last two years.

Jim Belardi, chief executive officer at Athene, said: "Investing in Challenger represents an exciting opportunity for us to support a well-established platform within the Australian market, a geography we have been studying given the current economic conditions and compelling demographic fundamentals."

He added: "In many ways, Challenger is the perfect partner for us – the company is led by an experienced management team, has a strong market position, attractive growth prospects, and shares our deep commitment to retirees. Together, we believe we can help Challenger continue to build long-term value, similar to what we've been able to achieve in building Athene's business in the U.S. and supporting the growth of our sister company Athora in Europe, where we are also minority shareholders."

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