Morningstar | Compulsory super, ageing demographics, and new CIPRs underpin long-term growth, but risk management is critical.
Challenger's dominant Australian annuities business is in a growth industry, benefiting from Australia's compulsory superannuation system and baby boomers transitioning into the pension phase. Management has proven effective in integrating its annuities in the wealth management ecosystem, including achieving brand awareness, and investing in relationships with financial advisors, dealer groups, platform administrators, and superfund trustees. There are also further sales opportunities in the huge Japanese retirement market, and it is poised to be a major beneficiary of Australia’s new Retirement Income Framework. Still, it is a high-risk business that depends on asset returns exceeding guaranteed returns on annuities and high sales growth to offset recurring annuity payments. Its funds management business, made up of boutique high-conviction funds and funds supporting its annuities business, is also growing.Challenger is an investment manager with offices in Australia and London. Co.'s operating segments are: Life and Funds Management (FM). The Life segment comprises Challenger Life Company Limited (CLC), a provider of annuities and guaranteed retirement income products, and Accurium Pty Limited, a provider of self-managed superannuation fund actuarial certificates. The FM segment comprises Fidante Partners and Challenger Investment Partners (CIP). Fidante Partners provides administration and distribution services. CIP develops and manages assets under Co.'s brand for CLC and third party institutional investors. The investments managed by CIP are mainly in fixed income and commercial property.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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