Challenger Limited · ASX:CGF
Challenger — Citi Annual Australian Investment Conference 2010
19 slides from Challenger's conference presentation, Oct 26, 2010
Slide 1: Retirement income trends accelerating
For personal use only Retirement income trends accelerating Citi Annual Australian Investment Conference - Sydney Dominic Stevens Chief Executive Officer 26 October 2010
Slide 2: Introduction
Introduction For personal use only • Record retail sales for Challenger – Annuity sales running above targets – Boutique FUM growth above system – Aligned investment business developing strong pipeline • Changing face of the retirement sector – Changes are structural and permanent driven by the dema
Slide 3: Sales accelerating across product range
For personal use only Sales accelerating across product range
Slide 4: Accelerating annuity sales growth
Accelerating annuity sales growth For personal use only Long term retail sales continue to track above • Record 1Q11 retail annuity 30% growth (black line) sales of $343m – up 40% 350 on pcp Impact of social • On target to deliver 20% 300 security changes increase in retail sales in Impact of 250 GF
Slide 5: Growth in boutique FUM
Growth in boutique FUM For personal use only Boutique Partnerships – FUM ($m) • Strong growth trend evident in 13,000 09/10 continuing 12,000 • Organic growth of 23% for the Total FUM growth Comprising: $5.0bn 11,000 quarter with a strong pipeline in Conversion of internal FUM $3.1bn 10,000 Net flow
Slide 6: Aligned investment model gaining traction
Aligned investment model gaining traction For personal use only • Ability to invest alongside a proven long term investor with robust prudentially governed investment processes • Broadening institutional relationships – Mandate from a large industry super fund to manage commercial property debt clos
Slide 7: Changing face of the retirement sector
For personal use only Changing face of the retirement sector
Slide 8: Retirement phase is about absolute returns and risk management
Retirement phase is about absolute returns and risk management For personal use only • Trends suggest retirees will be more focussed on creating a stable income 1 stream 1 2 • When capital is regularly % of Capital remaining withdrawn leverage to a negative outcome increases • Whilst the market Age
Slide 9: Retirement phase is about absolute returns and risk management
Retirement phase is about absolute returns and risk management For personal use only • Trends suggest retirees will be more focussed on creating a stable income 1 stream 1 2 • When capital is regularly 2 % of Capital remaining withdrawn leverage to a negative outcome increases • Whilst the market Ag
Slide 10: Retirement phase is about absolute returns and risk management
Retirement phase is about absolute returns and risk management For personal use only • Trends suggest retirees will be more focussed on creating a stable income 1 stream 1 2 • When capital is regularly 2 % of Capital remaining withdrawn leverage to a negative outcome increases • Whilst the market Ag
Slide 11: Do you believe the retiree will recover?
Do you believe the retiree will recover? For personal use only 60,000 Full recovery 50,000 requires 15.5% CAGR 40,000 30,000 20,000 Assumes 10% CAGR 10,000 0 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022 2025 Source: Bloomberg to 2010, All Ordinaries accumulation index, rebased to
Slide 12: Structural shift in asset allocations
Structural shift in asset allocations For personal use only • Australia is currently the most Fixed Interest allocation as a portion of Superannuation FUM equitised retirement market (~55%) in the OECD1 5 • Current allocations to bonds/notes/fixed income ~13% 4 versus the next lowest in the OECD of
Slide 13: Structural shift in asset allocations
Structural shift in asset allocations For personal use only • Structural shift also has positive By 2016 the implications for financial markets Australian Superannuation • Significant demand for longer term 6 assets may be larger fixed income would ease pressure than the four major banks 5 on our ba
Slide 14: Annuities – a core retirement solution in most OECD markets
Annuities – a core retirement solution in most For personal use only OECD markets Pension rules in other jurisdictions Full Partial Lump- Deferred Programmed Payment or Country Annuity Pension Lump-Sum Sum Annuity Account Based Pension Austria Belgium Germany Ireland Italy
Slide 15: Our focus
For personal use only Our focus
Slide 16: Product, brand, distribution
Product, brand, distribution For personal use only • Contemporary retirement products developed – Platform Annuity – Institutional product – Liquid Lifetime – With minor technical changes to regulations would launch deferred annuities • Expanded distribution team and focus – Demographic research to
Slide 17: Initial advertising campaign
Initial advertising campaign For personal use only 17
Slide 18: Summary
Summary • Retirement income sales accelerating For personal use only – Supported by long term structural changes – Continued focus on organic origination and product development – These drivers are still at early stages • Boutiques and Aligned investments growing – Significant FUM growth and pipelin
Slide 19: Disclaimer
For personal use only Disclaimer: The material in this presentation is general background information about Challenger Financial Services Group activities and is current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended t
Challenger — Citi Annual Australian Investment Conference 2010 on 6ix