Challenger moves into global property
Challenger International has acquired UK property asset Senator House as part of a diversification strategy by the group.
The acquisition of the London based building is Challenger's first property purchase outside of Australia.
Challenger International's managing director Bill Ireland says there are two features of interest that drew the group to Senator House.
"Firstly, the fact that we have hedged all the cash flows so that there is no currency exposure on the income streams which back our Australian annuity products in Challenger Life," Ireland says.
"Secondly, this transaction demonstrates that large investment opportunities in the UK property market can be structured with flexibility to meet either our Australian investment needs and/or to match liabilities for our UK Life company," he says.
The purchase price, for the nine-year-old property was A$238 million or 83.6 million pounds and will be held in Challenger's Australian life company investment portfolio.
Senator House is a 14,600 square metre eight-storey freestanding office building at 85 Queen Victoria Street, London. The building has 15-year leases to International Power, Eversheds (a major UK and European law firm) and Commonwealth Bank of Australia among others.
Last year Challenger opened a London office, and is currently waiting on approval for a licence to sell life insurance products in that market.
The group's UK business will seek to mirror Challengers Australian operations as a specialist in retirement income streams.
Challenger will continue to look for expansion into the UK and Europe.
Recommended for you
The US$837 billion fixed income manager has created a new head of asset-based finance role amid the rising client demand for asset-based financing and tailored investment solutions.
Platinum Asset Management has rejected a bid from PM Capital to acquire its two listed investment companies.
Asset managers may be encouraged to diversify their product ranges and branch into the retail or intermediary market but, two consultants argue, they may find it more complicated and costly than they expect.
Money Management understands Natixis Investment Managers is planning to launch its own private asset product for the Australian retail market.
