US retirement firm acquires 15% stake in Challenger

US retirement services firm, Athene Holding, has acquired a minority 15% stake in investment manager firm Challenger from Caledonia (private investments) for $720 million.

Athene, along with its strategic partner, Apollo Global Management would acquire the 15% equity interest which would result in a total expected minority economic interest of 18%, with 3% subject to Australian Prudential Regulation Authority (APRA) approval.

In an announcement to the Australian Securities Exchange (ASX), Challenger managing director and chief executive, Richard Howes, said the acquisition was an endorsement of Challenger’s market position and long-term growth prospects.

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“We look forward to working with Athene and Apollo as we continue to pursue our shared purpose of providing customers financial security for a better retirement,” he said.

Athene chief executive, Jim Belardi, said: “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 US and supporting the growth of our sister company Athora in Europe, where we are also minority shareholders”.

The acquisition followed Athene’s pending agreement to merge with Apollo. It said entering the Australian market was part of its strategy to be a global solutions provider and followed business initiatives over the last two years in the UK and Japan.

Athene had operations in the US, Bermuda, and Canada.

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