Challenger up in first quarter

Challenger's retail Life sales hit $364 million this quarter, which chief executive Brian Benari said would see Challenger on track to gain an additional 30 per cent on last year's figures by 30 June 2012.

Despite Q1's typical sluggishness, Challenger has increased assets and funds under management (AUM) to $31.4 billion as of 31 March 2012, a 16 per cent increase from 31 March 2011. 

AUM gained 6 per cent on last quarter, which Benari said was a reflection of strong Life sales, positive boutique inflows and positive movement in the market.

Baby boomers' movement into retirement had impacted positively on Life sales, and "retirees were recognising that they needed to have at least a cornerstone of their portfolio in a guaranteed (income) style product, and I think we're the beneficiaries of that," Benari said. 

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Challenger's boutique funds under management (FUM) grew by 9 per cent over the quarter, bringing Challenger's boutique FUM to $17.8 billion as of 31 March 2012. 

"I would say that's a continuation of a theme in the strong inflows that we've been experiencing across all our boutiques now for quite an extended period of time," Benari said.

He said the boutique model lent itself to alignment between investors and fund managers - an important factor to investors and a strategy that has been gaining traction.

Benari said Challenger's 10 boutiques had surpassed industry benchmarks since inception, making them attractive to investors. Security provided by corporate backer Challenger was "providing all the infrastructure, compliance and all those matters that safeguard boutiques," he said.

Benari said Challenger would now work to continue the "theme of strong inflows" into its boutique funds and might consider adding another boutique if the opportunity arose.