Investment Matters

Company News: Pact, Challenger

Pact announced a new CEO.  Mr Sanjay Dayal’s past roles included senior management positions with BlueScope Steel and Orica / ICI.  We view this appointment as a positive step – Pact is currently under-earning off its assets.  We expect this well-credentialed appointment to turn the operational (and subsequent financial) performance of Pact, through accelerating operational improvement programs, taking steps to improve margins, and continuing to improve the company’s cost base.


Challenger announced an extension of its agreement with Japanese company MS&AD.  It will sell ¥50 billion (~A$640m) of USD and AUD denominated annuities per year for a minimum of five years into the Japanese market, via Mitsui Sumitomo Primary Life Insurance Company (MS Primary) (a subsidiary of MS&AD).  This agreement increases the volume of annuity sales and extends into USD denominated annuities (previously AUD only).

In addition, MS&AD intends to increase its shareholding in Challenger to 15% (currently 13.85%), and will nominate a director to join the company’s Board.

This announcement was well received by the market.

- Fleur Graves