Funds Management focuses on building savings for retirement by providing products seeking to deliver superior investment returns.

As one of Australia’s largest active fund managers1, we invest across a broad range of asset classes including fixed income, commercial property, Australian and global equities and alternatives.

Over the years, our investment teams have developed strong long-term performance track records. Fidante Partners forms long-term alliances with talented investment teams to create, support and grow specialist funds management businesses. Fidante Partners’ deep experience in funds management, extensive investor networks and operational infrastructure enable investment teams to focus on what they do best, managing investment portfolios.

Funds Management also includes CIP Asset Management (CIPAM), which is an institutional manager that principally originates and manages fixed income and commercial real estate assets for leading global and Australian institutions, including Challenger Life.

“This year we have has seen strong net flows into the business despite volatile investment markets. We also made good progress on a range of strategic initiatives, including bringing new high-quality managers and strategies to market”

Nick Hamilton – Chief Executive, Funds Management

Funds Management’s 2020 financial performance

Funds Under Management
($bn)

  1. CIP Assets Management
  2. Fidante Partners

Value of assets
managed by Funds
Management

Increased by 3% despite
COVID-19 pandemic
market sell-off

Funds Management
EBIT2 ($m)

  1. Performance fees
  2. EBIT excluding performance fees

Preferred measure of
underlying business
performance

Earnings growth driven
by FUM growth and
performance fees

  1. Consolidated FUM for Australian Fund Managers – Rainmaker Roundup, March 2020.
  2. Earnings before interest and tax (EBIT).

Adding new boutiques and investment strategies

Fidante Partners and Ares Management Corporation strategic joint venture

Fidante Partners continues to expand its product offering by adding new boutiques, forming new partnerships and developing new investment strategies for existing managers.

In September 2019, Fidante Partners and global alternative asset manager Ares Management Corporation (NYSE: ARES) established a new strategic joint venture, Ares Australia Management (AAM). The joint venture will provide Australian investors access to credit and alternative investment products managed in the United States by Ares Management Corporation.

In this volatile, uncertain and low interest rate environment, investors are focused on finding reliable sources of income without risking severe capital losses and with better risk diversification than traditional investments within their portfolio.

In May 2020, AAM launched its first product, the Ares Global Credit Income Fund, which offers Australian investors access to a higher income strategy with a focus on capital preservation. The Ares Global Credit Income Fund targets a return of between 3% and 4% per annum, with distributions paid monthly.

Enhancing our sustainability capability

Integrating ESG considerations into Fidante Partners boutique investment practices

Considering environmental, social and governance (ESG) risks and opportunities supports Challenger in delivering on its vision to provide financial security for retirement. Challenger’s long-term sustainable returns are achieved through integration of ESG practices across the business.

This year Challenger continued to develop its ESG practices and supported Fidante Partners to embed ESG practices within their boutique fund managers. All boutiques have developed their own standalone ESG policies and are now signatories to the United Nations’ Principles for Responsible Investment (PRI).

The Alphinity Sustainable Share Fund goes one step further with ESG, with its focus on sustainability. It has a clear responsible investment mandate and is committed to supporting companies that have strong practices and make a positive contribution towards a sustainable society. A key area of focus for the fund is to invest in companies that ultimately contribute to the advancement of the UN Sustainable Development Goals (SDGs).

The fund has also recently changed its fossil fuel policy. It has committed to no longer invest in fossil fuels unless the company involved has clearly demonstrated commitment and traction to reduce emissions aligned with the Paris Agreement. This includes thermal coal, oil and natural gas.

Since inception in 2010, the fund has performed very strongly. Over the past three years it has outperformed its benchmark by over 4% each year.

Alphinity Sustainable Share Fund performance (%)