Challenger Seeks New Manager for $3.5B Portfolio

Wealth management firm Challenger is exploring new options to oversee its $3.5 billion real estate portfolio, a role currently held by Elanor Investors Group. Elanor, burdened with debt and suspended from the ASX since August, is now at risk of losing the mandate, which makes up over half of its listed funds under management.

Challenger had only recently reaffirmed its relationship with Elanor after a review but has now begun quietly seeking alternative managers. This shift comes as Elanor struggles to stabilise financially, selling key assets like Cradle Mountain Lodge in an attempt to retain Challenger’s business.

Elanor previously announced plans to improve its financial position, considering asset sales and even a potential business sale, with Citi advising on the process. However, these efforts have been sluggish, adding to uncertainty around the company’s future. The slow divestment of hotel assets and delays in finalising financial accounts have exacerbated concerns.

Larger US investment firms showed interest in acquiring Elanor’s hotel portfolio, but no deals materialised. Meanwhile, the company has managed to offload $53.5 million in assets but still faces refinancing challenges. It recently secured an $85 million credit deal but must restructure an additional $40 million in unsecured corporate notes before it can proceed with financial reporting.

The search for a new manager signals that Challenger is preparing for all possibilities. If Elanor fails to regain stability soon, it could lose one of its most crucial asset management agreements, further intensifying financial pressure.

Source: Australian Financial Review, Mortgage Business, Business Insider, Fidante