Athene and Apollo to Buy 15% Stake in Australia's Top Annuity Issuer

What You Need to Know

Apollo is in the process of getting control over Athene.
In Europe, Athene has a big minority stake in Athora.
Challenger has about $78 billion in total assets under management.

Athene Holding Ltd. and its biggest investor are investing in Australia’s retirement services industry.

Athene and the investment company, Apollo Global Management Inc., say they have agreed to pay $540 million for a 15% stake in Challenger Ltd., a firm that sells annuities and investment management services in Australia.

Challenger is a Sydney-based company that was founded in 1985. It now has the equivalent of about $15 billion in life investment assets, in U.S. dollars, about $78 billion in total assets under management.

Athene — a Hamilton, Bermuda-based annuity issuer that ended the first quarter with about $206 billion in total assets — and Apollo started out with a 3% stake in Challenger.

Completing the purchase of the 15% stake would give Athene and Apollo an 18% stake in Challenger, Athene said Tuesday.

The deal is subject to approval by the Australian Prudential Regulation Authority.

Athene and Apollo

Apollo now has a 45% stake in Athene. The two firms announced in March that Apollo is trying to merge with Athene through a stock swap that would leave Apollo shareholders with a 76% stake in the combined company.

Athene’s Strategy

Jim Belardi, Athene’s CEO, said in a statement that Athene likes the idea of investing in a well-established retirement services company Australia.

“In many ways, Challenger is the perfect partner for us,” Belardi said. “The company is led by an experienced management team, has a strong market position, attractive growth prospects, and shares our deep commitment to retirees.”

Athene owns a large minority stake in Athora, an annuity issuer in Europe. In 2018, it sold a majority of its Athora shares while maintaining a smaller stake.

Athene says it also is pursuing new business initiatives in Japan.