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Challenger has entered into a non-binding memorandum of understanding with US group Apollo Global Management, to consider creating a joint venture that would build a non-bank lending business across Australia and New Zealand.
Apollo had teamed up with retirement services company Athene to acquire an 18 per cent minority interest in Challenger over the course of 2021.
Since then, Challenger reported that it has engaged in talks with Apollo to explore additional opportunities to work together.
“The strategic dialogue is part of a broader focus on building upon and enhancing the parties’ retirement services offering in Australia,” Challenger stated.
“The proposed initiative is strongly aligned to Challenger’s strategy and focus on pursuing growth opportunities, as well as further diversifying its business and providing important origination capability to support the growth of both the life and bank businesses.”
The move would be Challenger’s second recent foray back into lending, following the purchase of Australian bank MyLife MyFinance last year from Catholic Super.
The fund manager stated that its relationships in Australian lending markets and its operating platform, coupled with Apollo’s global credit investing capabilities and retirement services providers would provide “significant opportunities and potential value”.
Further details of the potential new lender will be provided as negotiations between the two companies progress.
The investment management company previously had a large mortgage management business, which it sold to NAB in 2009.