Australia’s Challenger collapses after key shareholder cuts stake By Reuters

By Echha Jain

(Reuters) – Shares in Australia’s Challenger ended down 11 percent on Thursday after a key shareholder more than halved its stake in the investment management firm.

The stock fell as much as 14.4% to $5,995, posting its biggest intraday decline since August 2022 and hitting its lowest level since December 2023. It was one of the benchmark’s top losers, which ended 0.4% higher.

Trading volume rose with nearly 47.3 million Challenger shares changing hands, compared to its 30-day average of about 1.4 million shares.

Challenger said U.S.-listed Apollo Global Management (NYSE: ) reduced its holding to 9.9 percent from 20.1 percent to support the “redeployment of capital to other growth opportunities.”

Morningstar equity analyst Shaun Ler believes Apollo reduced its stake because it found a more profitable opportunity than the capital-intensive Challenger annuities.

Given Apollo’s significant prior ownership, the reduced stake may allow Challenger’s board and team more freedom to make independent decisions, Ler added.

Challenger and Apollo remain committed to pursuing a number of initiatives, including an asset creation and distribution partnership, Challenger said in its statement.