Challenger eyes Asia assets for Aussie super funds

Saying superannuation funds want more international exposure, Challenger buys a stake in an Asian boutique and is targeting other deals.
Challenger eyes Asia assets for Aussie super funds

Australian investment manager Challenger is seeking to respond to increasing demand from the nation’s $1.3 trillion superannuation funds industry for international securities exposure.

Challenger, with $30 billion under management, acquired an equity stake in Asia-Pacific (ex-Japan) and Greater China equities firm MIR Investment Management in a deal finalised on May 11.

The size of the stake, which belonged to MIR founder Michael Triguboff, was not disclosed, although Challenger’s style is for its boutique partners to retain controlling interests.

Just this month Challenger reorganised its boutiques under one umbrella, rebranded as Fidante Partners, in a drive to separate these from its diversified funds.

The MIR stake is its 11th boutique partner, but significantly its first with an Asia presence. MIR is an active stock-picker managing $1 billion via 16 investment staff across Singapore, Sydney and Melbourne. It has a joint venture based in Hong Kong, MIR Libra, focused on Greater China. Its CEO is John Beggs and CIO Kenny Tjan.

“In MIR we see Asian equities and Greater China equities as asset classes that are in high demand, with lots of super funds looking for diversity and investments outside of the Australian market,” says Cathy Hales, general manager for Fidante Partners.

Of the $1.3 trillion superannuation industry, around 29% is invested in Australian equities, 24% in international equities, 10% in Australian fixed income and 6% in international fixed income, according to the Association of Superannuation Funds of Australia (Asfa).

Hales says Fidante is also open to acquiring stakes in other internationally exposed investment boutiques, including fixed income (see previous AsianInvestor article) and alternatives. It is also eager to market MIR’s products internationally, as it is with its global equity stock-picker Five Oceans AM.

“MIR’s product range is of appeal not only to Australian investors, but also to those in the Asia-Pacific region, Europe and potentially the US,” she notes. “There are a number of opportunities for our existing boutiques that we would like to explore internationally.”

As part of its partnership deals, Fidante provides administration, client service, marketing and distribution services to its boutiques. Collectively it has $18.8 billion across 11 firms.

Established in 1985 and listed on the Australian Securities Exchange in 1987, Challenger focuses on providing retirement savings for Australians. In terms of investment businesses, it has a life division and a funds management division. The latter includes Fidante Partners.

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