Good morning, everybody, and welcome in person, and to those online, to Challenger's 2022 Investor Day. I'm Mark Chen, Challenger's Head of Investor Relations. We're coming to you today from the Wesley Centre in Sydney. It's great to be able to present here in person today for what has become an integral part of our investor relations program. Before we begin, I would like to acknowledge the Gadigal people of the Eora Nation, traditional custodians of the land on which we are hosting this event today, and pay my respects to the elders' past, present, and emerging. Today, you'll hear from presentations from a number of our Challenger team with a quick break in between. For those of you who are online, we'll do our best to keep to schedule, and you'll receive a notification when the session after the break is about to recommence. There is also the ability to ask questions online. Please let us know if you have any technical difficulties or require assistance throughout the morning. For those of you in the room, as a matter of housekeeping, can you please turn your phones onto silent? Today's presentations will be followed up by a Q&A session, both in the room and questions coming in online. After the Q&A, for those here today, there will be an opportunity to talk with the leadership team over some light refreshments. I'll now hand over to Nick to get us underway. Well, thank you, Mark. Let me extend my welcome to everyone as well today for our 2022 Investor Day here at the Wesley Centre, and for those joining online. As we return to a new normal post this extended pandemic period, I'm delighted that so many people could turn up in person today. It's a pleasure to take you through our plans for the future and a privilege to lead Challenger at such an important time for our organization. Five months into the role of Chief Executive, and after seven years at Challenger, I'm pleased to report that I'm more optimistic and confident about our business's future and our ability to seize the opportunities ahead. Since we presented at our last Investor Day, a great deal has changed. As a society, we've endured a second wave of the pandemic, a global supply chain crisis, conflict in continental Europe, and until recently, closed borders, all of which had fueled or have fueled a markedly different set of economic conditions. Here in Australia, we have volatile equity markets and markets more broadly, concerns around the housing market, and a new government. Against this backdrop, our purpose of providing customers with financial security for better retirement seems more important than ever. As an organization, we have weathered our own challenges in recent years. I'm confident this experience has served to strengthen our business and our team, now galvanized to take Challenger to the next level. In Challenger, we have a clear purpose and a powerful brand, one that is synonymous with guaranteed retirement income. There is an opportunity to build on this strong foundation and expand our offering to bring the best of Challenger to more customers than we do today. We will achieve this by leveraging the platform of the Group, our Life business, our Funds business, and our new Bank. Working as One Challenger to drive stronger outcomes for our customers, for our shareholders, and for our people. Today, there are many ways we can help our customers meet their financial needs. Putting the customer at the forefront of what we do will make us even more relevant. Our purpose and our strength of our platform will enable us to build a more diversified business to support even more customers. We start with a strong core. Through our three complementary businesses, we have a dynamic and contemporary platform that combines both balance sheet and fee-based business. Our Life Company plays an important role delivering customers with reliable and secure income streams that provide financial peace of mind. We've also innovated our product offering and broadened our customer reach, creating a more diversified and meaningful Life business. Last year, we acquired our new digital bank. This is a very squeaky floor, but I have to stand back. I didn't bring my reading glasses today, so, I'll find a wide place to stand here. Last year, we acquired our new digital bank that combines ease of use technology with our highly regarded lending capability, presenting an exciting and scalable opportunity. By listening to our customers, we identified a significant customer need for attractive savings and income product at and in retirement. Funds Management combines one of Australia's leading credit origination platforms, a contemporary multi-affiliate manager, a real estate capability in Australia and in Japan, and investment solutions. In addition to powering our balance sheet investment programs, Funds Management has developed a strong reputation for its alpha capability across income and growth. We also have a track record of developing successful and enduring strategic partnerships across our business. Underpinning our growing franchise, we have a strong balance sheet and sustainable capital settings. Key to our success is our highly motivated and capable team. They are the bedrock of our organization. In my role as chief executive, one of my priorities has been our people. Attracting and retaining the best talent and creating an engaged and exciting workplace for our employees, diverse, inclusive, and high performing, this is one of my key priorities. Results from our recent employee survey reinforce Challenger's culture of teamwork, delivery, and going the extra mile for our customers. Great companies and teams create openness and permission to challenge. What is most pleasing in the recent survey is that our safety to speak up score rose significantly to 86%. Our team has not missed a beat in delivering for our customers despite the challenges of recent years. Now we're returning to the office and welcoming new employees, many who've joined since lockdown. We have an exciting year ahead, strengthening and reinforcing our culture. A very pleasing signal of how quickly we are moving from words to action was during Imaginate 22, which you can see a photo of here, an employee event where teams came together and pitched innovative ideas themed around One Challenger, growth, and simplification. I was inspired by everyone's energy and their enthusiasm to take a customer-first approach. 80 teams submitted ideas that speaks to our team's commitment to drive meaningful change and reinforces my confidence in our talented and capable people. I look forward with a great deal of confidence that our business has the building blocks for growth. As we look to our target demographics of pre-retiree and retiree, we are well placed to benefit from the attractive structural tailwinds over these coming decades. Challenger is a unique business, and we have the attributes and the DNA to meet the opportunity ahead. Our brands are well regarded in the industry. This includes Challenger, a leading retirement brand, and Fidante, a preferred partner for talented investment professionals. We have a proven asset origination track record, and the largest and arguably most experienced fixed income team in the country. More broadly, we have a team of over 85 people across Life and Funds Management with responsibility for our investment program, including ALM, alternatives investing, credit and private lending, domestic and Japanese property. Our superior investment capabilities have been widely recognized. In Fidante, over three years, 97% of funds under management has outperformed the benchmark. Of our investment strategies eligible to be rated by Lonsec and Zenith, 39% are rated highly recommended and 90% rated recommended or above. We have an extensive distribution footprint across retail and institutional client channels. Our Institutional Life client base has doubled over the last five years. In Funds Management, 90% of the top 50 Australian institutional clients are clients, sorry. We're also pleased to be awarded Zenith's 'Distributor of the Year' for the second consecutive year. Our administration and investment operations excellence has supported our business's growth to over AUD 100 billion, and the team handle over 2 million transactions annually. Our people are, without doubt, one of our strongest and competitive advantages. We are a knowledge business, and our high-performing and collaborative culture will continue to make Challenger an attractive and exciting place to work. Leveraging these competitive advantages, we're really well-placed to take advantage of long-term tailwinds. Australia's world-class super system is evolving rapidly and is forecast to triple over the next two decades. Now, living longer in retirement is undoubtedly a great thing. However, for so many, it means fear of running out of money. This represents a significant need in our community to support retirees, so they can enjoy the retirement they deserve. Intergenerational wealth transfer is at record levels. With AUD 175 billion expected to transfer each year by 2040, the size of the asset pools of those entering and at retirement will continue to increase. Macroeconomic conditions are changing rapidly. This month, the RBA begun tightening monetary policy. For many retirees and savers, low interest rates have posed a challenge, and higher rates will likely be welcome news. Rising rates will benefit our business, for our customers, and will also support the Bank and the Life Company. For example, Challenger's three-year term annuity rate will earn customers 4% guaranteed today. At the beginning of the financial year, that was 1.4%. The equivalent lifetime policy will earn a 70-year-old roughly 17% more today as compared to last financial year. These are significant moves that are really positive for our target customer base. Widening credit spreads will also provide a positive impact on the future Life margins over the longer term. Looking forward, we see strong and growing investor demand for differentiated yield that provides greater returns and capital certainty. This highlights the opportunity for Challenger to play a broader role and to meet a wider range of income needs. In Funds Management, the increased dispersion of returns will provide good opportunities for active management, as will rising demand for less correlated and more differentiated investment capability. We have an opportunity to play a more meaningful role throughout our customers' lives, leveraging what we are good at. Today, you will hear about our capability to deliver both guaranteed and higher income for those saving for and spending in retirement. You'll also hear about the increasingly sophisticated needs of our institutional clients. Given the breadth of our platform, Challenger is uniquely placed to provide tailored and bespoke investment and retirement solutions to the institutional client market. You'll hear about our partnerships, which are both complementary and that will enable our strategy. Today, we are focusing on yield, our solutions, and our partnership opportunities. It would be remiss of me, though, to not highlight and say a few words about our high-quality active management platform, which we think of as our alpha capability. Combining CIPAM and our 17 highly regarded affiliates, we deliver best-of-breed alpha solutions across equities, credit, real estate, alternatives, and fixed income. We are committed to delivering investors access to high-quality, differentiated investment management. Our extensive and growing lineup of alpha capabilities continues to generate strong long-term returns for our clients and provides Challenger diversification and access to customer market segments. The future looks bright, and our new managers have delivered exceptional results. We've put a number here of AUD 1.7 billion launched for, raised for new managers who are now gaining scale and building momentum. The team continually look at ways to provide a more contemporary offering to clients. This includes developing new investment strategies for existing managers and forming new partnerships with best-in-class managers, locally and abroad. We are delighted to welcome Cultivate to our stable, a new Australian-based agriculture and food private markets boutique, and indeed, one of the principals is in the room today. Our alpha capability provides us with a broad customer reach, especially in our domestic retail advised and high-net wealth segments. We see significant opportunity in this part of our business, with approximately AUD 130 billion of available capacity that will continue to support growth. To grow and succeed, we must implement a strategy that is long term, that is ambitious, and meets the needs of our stakeholders, present and future. Today, we're a business comprised of multiple brands. Our retirement brand is intrinsically linked with annuities. Funds Management operates under Fidante and the CIPAM brand, and our new digital bank is branded MyLife MyFinance. Going forward, we'll expand the Challenger brand to become synonymous with high-quality income generating products and a wider retirement offering. As part of this strategy, CIP Asset Management, or CIPAM, will come under the Challenger brand as Challenger Investment Management. We're also making excellent progress transitioning the Bank to the Group brand, allowing us to broaden our position as a brand leader in retirement income. We're rightly proud of our role providing customers with a financial guarantee of certainty. With current markets, we see strong opportunity for our core annuity business. We will, however, be so much more. Reaching customers through our advisor base has long been a position of strength for Challenger. We continue to see potential of this channel, and our plans will protect and grow our enviable position and reputation. We can also deliver a diversified range of products to customers across a broader number of channels. We'll expand our offering to include meeting the needs of affluent and high-net wealth customers, an area with attractive structural tailwinds and where the advice channel is increasingly focused. As we look ahead, we're establishing the building blocks for us that will enable us to service and grow into the large and growing self-directed market. To help deliver on our customer strategy, I'm excited to share that we're creating one customer division. That will bring together all of Challenger's customer touchpoints. Led by Group Chief Customer Officer, this division brings together the skills, the resources, the talent, and the commitment to reach more customers. As we look to position our business for the future, I'm also delighted that Anton Kapel has been promoted to Chief Executive of the Life Company and our Life and Solutions business. Anton has extensive investment experience. I know Anton is in the room here somewhere. I saw him. He has extensive investment and balance sheet expertise and is ideally placed to lead our Life Company and to grow into our ambitions around solutions. We will expand our offering across guaranteed, non-guaranteed products and capitalize on our broader yield, alpha, and investment solutions capabilities. We have a strong and successful partnership with MS&AD. This has supported our ambitions to take our products to more customers and more markets and has delivered long-term benefits for both businesses. We will build on this success and expand our strategic partnerships. I'm pleased to share that we've entered into a non-binding MoU with SimCorp, a global technology leader and provider of technology to Challenger for over 17 years. Under this agreement, we'll establish a joint venture. SimCorp's market-leading software and our significant team will create asset manager, asset owner software-as-a-service. We have also progressed our relationship with Apollo, with whom we share a common purpose. We've continued the substantive discussions on forming a joint venture in domestic lending. The team are working diligently today to ensure that the structure, is right for us to complete the joint venture, which is looking at tax, people, and regulatory considerations. Importantly, these partnerships are complementary, and they diversify our offering. They create new fee-generating business and ensure that we leverage our expertise and our partners' expertise to drive growth. Capitalizing on our competitive advantages, we see significant opportunities ahead. In response, we've developed compelling strategies that you'll hear about through today's presentation. Customers are increasingly looking at a broader set of asset classes to build and protect wealth and to generate income. Our response focuses on three key areas, understanding the customer need, understanding that our capability that can meet that need, and how we can deliver a great customer experience. Catherine van der Veen and Lucy Foster will outline our strategy for this exciting opportunity. Demographics and market volatility will drive investors to yield guaranteed and higher income. As a spread and fee-based business, we are well placed to meet this opportunity. We'll grow and expand our income-based products, leveraging our strong track record in delivering attractive returns. Through our Bank, we will expand our savings products. Victor Rodriguez and Mark Ellis will take you through this in more detail. We see significant opportunity in the Australian lending markets, an opportunity which our joint venture with Apollo seeks to address and which Chris Plater will provide us more detail on. Our business' administration and investment operations platform has been a competitive advantage for many years. As we look forward, solving complexity and achieving scale really matter. Our solution, to partner with a global technology leader to take our existing platform to the next level, and that will also enable us to meet the needs of other financial institutions, asset owners, and asset managers. Stu Kingham will take you through this detail in today's presentation. I'm also pleased to welcome Peter Schliebs, our Chief Investment Officer, who will then provide an overview of investment markets, our capital position, the balance sheet, and why we're so well positioned for growth. Capitalizing on these opportunities, we'll build a more diversified business, and we will expand our brand. Working as one team, we'll broaden our product offering and broaden our distribution channels to play a more meaningful role in more customers' lives. I will now hand over to Catherine and Lucy to explain our strategy to meet a wider range of customer needs. Thank you, Nick. Good morning, everyone. I'm Lucy Foster. I'm into my third year now at Challenger after 20 years in wealth management in the U.K. and Australia. Catherine and I are excited to present to you our customer and distribution strategy today. Our One Challenger strategy seeks to bring to life our plan to maximize our unique and leading capability, our strong brand, our customer focus, and our exceptional distribution reach to capitalize on the significant opportunity that is in front of us to meet more customer needs. The Challenger brand is synonymous with retirement income. According to advisors in Australia, the Challenger brand is number one in the retirement income category. When advisors think retirement income, they think Challenger. We have a very strong presence amongst Australian retirees as well, after years of investing in and developing our brand. This strong brand gives us a formidable platform upon which to expand our universe of products and solutions to meet the needs of our customers, our advisors, and our institutional partners. We are Australia's number one annuity provider. We have a strong balance sheet with over AUD 22 billion of funds under management. We're also one of Australia's fastest growing fund managers, both through our own internal capabilities and those of our Fidante boutiques. It's not just size that matters, it's quality. With 97% of our Fidante boutiques outperforming their benchmarks over the past three years, we have both the capability and the credibility to expand our market presence. We lead the market with our distribution strength in our retail advice and institutional channels across our Life and Funds Management businesses. Our institutional sales capability is sophisticated, with over 90% of Australia's top 50 super funds as clients of Challenger. More than 35% of these clients having two or more products with us, and more than half of these clients having been with Challenger for more than eight years. Our retail advice channel comprises major advisory groups, IFAs, platforms, and research houses. Our reach in the retail advice channel is extensive by way of advisors and licensees serviced and our fund distribution footprint. We service over 8,000 advisors in Australia today, which is half the market. Our goal is to use this position of strength across brand, investment products, and distribution to deepen our penetration into the market by offering a broader range of products and solutions to meet more customer needs. The opportunity to move from being a multi-brand business to a single, strong, united broad Challenger brand is the obvious next step for us as we seek to stand for more to our customers, advisors, and institutional partners. The large majority of customers in Australia intend to use a range of retirement income products beyond superannuation and the age pension, which opens up a significant opportunity to extend beyond specialist retirement income products into income generation more broadly. Our customers are telling us that they know who we are, and we are seen as dominant in the retirement income space. Over half of Australian retirees are aware of the Challenger brand. More than three-quarters of these customers associate the brand with retirement income, and more than two-thirds of these customers see Challenger as dominant in retirement income. Our move to Challenger branding across our B ank and Funds Management business will unlock the brand equity we have spent many years developing and serve to unify our offerings under the one strong Challenger brand for our customers. We will continue to use the Fidante brand for our boutiques as it is well established and distinctive in the market. Our customers are at the heart of Challenger, and we've traditionally thought about our customers through a business unit lens. This has allowed us to become strong and successful in our Life and Funds Management businesses. The next phase for Challenger is to think beyond our business lines to draw from all parts of Challenger to meet more customer needs. We will combine the distribution strength across the Group to meet the needs of our intermediaries, so that customers can use the channel of their choice to access their preferred products and solutions. By combining the capabilities of the group, we can think expansively about how to solve a wider range of customer needs and wants through products and solutions that go beyond annuities, funds management, and banking solutions. The power in combining these capabilities together means that we can really be the first place that customers go to when they look to solve for retirement for themselves or for the customers they represent. Customer needs are evolving. As super balances grow, customers are becoming more sophisticated, and they're willing to take more risk. Post-COVID, we know that nearly two-thirds of investors will accept moderate to high variability in exchange for higher returns. With more than half of customers looking broadly at structures beyond superannuation and the age pension to build wealth and generate income in retirement, this opens up the platform for Challenger to bring more solutions, yield, and alpha-based offers to meet more customer needs. Rising affluence has created a couple of dynamics here. Advice has migrated upwards towards the affluent and high-net-worth investors with minimum price points and higher FUM levels. The needs of the mass are predominantly being met by their superannuation funds, where the majority of their investable assets are held. The second dynamic is that the affluent and high-net-worth investor continues to seek traditional advice when designing their retirement strategies. However, they are also looking at alternative ways of designing and implementing their retirement portfolios. The final but most significant trend is the increasing sophistication of superannuation funds as consolidation drives up the scale of these large institutions. To meet the needs of their members and their performance and Retirement Income Covenant obligations, super funds are looking for tailored bespoke solutions that can integrate with their existing strategies. With a One Challenger mindset, we can bring the best of our capabilities across the Group to design these tailored solutions for our institutional clients. More on this shortly. Now, let's move on to distribution retail first. Our distribution strategy will be to leverage our expansive distribution footprint across our retail advice channels in Life and Funds Management and to capitalize on our growing presence in the high-net-worth advisory broker and self-directed channels. I'll cover each of these briefly. Retail distribution has long been our position of strength at Challenger. More than half of advisors in Australia have FOA with Challenger, and this extends to two-thirds of licensees. This channel remains important to us, and we are confident of continued success through our well-established and entrenched relationships. We have a significant track record of influencing research houses with model portfolio outcomes, and we can see the bigger opportunity in front of us to bring more solutions to retail advisors under the Challenger brand, so they think of Challenger first when building portfolios for their clients. The high-net-worth market has grown significantly with increased household savings, reduced debt, a surge in asset valuations, and intergenerational wealth transfer. Australia is one of the wealthiest nations per capita in the world, with over 80% of wealth held by 30% of investors. Over the last three years, we have invested in and developed successful relationships with high-net-worth advisory groups and family offices, which has resulted in the raising of significant FUM in our Funds Management business. We have a strong understanding of this sophisticated channel, and we have the capabilities and senior distribution talent to offer them a broad range of their preferred choice of solutions and products, tailored, exclusive, liquid and illiquid, guaranteed and non-guaranteed. While we know that nearly half of the affluent and high-net-worth investors are intending to use advice, that leaves roughly half that are intending to do things on their own. Now, while it's not entirely one or the other, we do see many high-net-worth investors initially looking for advice to design their retirement strategies and then looking to transact or manage the portfolio themselves. Challenger is well placed to participate in this hybrid dynamic with high-net-worth investors. Our approach here will be to access this segment initially via online platform capabilities, such as the major advisory broker houses in Australia, who have evolved significantly over the years to move from transactional relationships to providing sophisticated and tailored advice to the affluent and high-net-worth. Our strength here for the affluent and high-net-worth investors will be to leverage our trusted Challenger brand to earn the opportunity to offer a wider range of solutions to these customers through the channel of their choice, whether it be through advice, family offices, private banks, broking, or self-directed. We have a sales team that is large, well-regarded, and with deep technical capability. I will now hand you over to Catherine van der Veen, who will present to you on our institutional partnership strategy, our customer focus, and our product pipeline. Thank you. Thank you, Lucy. I'm Catherine van der Veen. I'm into my third year at Challenger with Lucy, and I bring 20 years of experience across retail banking and wealth management in Australia. Our strength in the institutional market sets us up well for the opportunities ahead. The concentration and sophistication of institutional investors is continuing, with the ongoing consolidation in the sector resulting in a smaller number of larger funds. These funds are also becoming increasingly self-sufficient as they insource the commoditized components of their investment management, and they look to work with a smaller number of partners to complement their internal capabilities. Funds will work with a smaller number of partners, and they will expect more from them. Those with a broad range of high-quality capabilities are going to win in this space. Being able to respond to this need for sophistication is an essential ingredient to remaining relevant in the institutional market, deepening existing relationships, and solidifying long-term partnerships. Challenger has an extensive portfolio of capabilities, as you can see on the slide here. The ability to tailor solutions will be an essential component of success in this space, especially as the funds drive towards their strategic imperatives of the Retirement Income Covenant, the Your Future, Your Super obligations, which we know is driving strategy and decision-making. Challenger has a unique combination of balance sheet and fiduciary services expertise. Asset class, sector, exposure management, risk management, and risk transfer capabilities. Outcome and solution-oriented portfolio construction, and a deep understanding of the domestic market and key relationships with all the players. We are the only provider in Australia to provide this full set of capabilities and the ability to combine them to create tailored solutions for our partners and their customers. Let's talk more about customers. Success is deeply understanding the needs of customers. Consistent with trends over the last two decades, the Australian customer is aging, and they are holding a disproportionate share of wealth relative to their share of the population. Moreover, older Australians are growing their wealth even faster than their share of the population. As people die later in life, they are passing on their wealth to their partners and their children. Housing wealth, we know, is a large driver of this result. Older Australians hold a disproportionate share of housing wealth in Australia. They spend down on that slowly and pass that on to their partners and children in older age. These trends play into Challenger's strengths. Our target customers are outlined on the left here. They are aged 45 years and above, and they span all affluence levels. The mass customer we know is now predominantly served by their superannuation fund and is well served by our institutional strategy, which we've outlined today. The affluent and high-net-worth customer segments control 80% of the investable assets in the country, which is over AUD 4.1 trillion today. The high-net-worth channel is also growing rapidly. There are 635,000 customers in this segment, and they hold over AUD 2 trillion of investable assets. For the ultra-high-net-worth, they are also growing rapidly, and they are demanding bespoke and tailored solutions to meet their needs. Under the channel header, we have divided this into our three primary channels of direct and broker, intermediated, which includes retail advice, and the institutional channel. As just outlined, we are planning to use our strong distribution footprint to address the needs of these target customers in the channel of their choice with a Challenger solution that meets their need. I'd now like to take you through just one example of many, which will illustrate how we plan to meet the need of our target customer through their preferred channel. For this example, we have a 68-year-old retiree. She has between AUD 600,000 and AUD 1.2 million of investable assets. There are over 1 million individuals in Australia who fit this profile today. She seeks advice from her independent financial planner and is looking for a level of yield from her portfolio with some certainty and potentially some longevity protection. Her advisor tailors a retirement portfolio for her. He chooses Challenger, as he knows we provide a range of investments to construct a portfolio with strong yield, investment returns, and longevity. He chooses a Challenger term deposit, as it is paying a market leading rate and offers the security of a government guarantee. He complements this with a fund from the Challenger Income Series, as it is paying a target level of yield but retains capital flexibility for our customer. He also makes an allocation to an inflation-linked lifetime annuity to provide our customer with a guaranteed level of income and some longevity protection. Using our yield platform, the advisor has been able to construct a portfolio for the customer to meet her needs with target yield, longevity protection, and capital flexibility. While this is only one pathway, it does demonstrate that for each of these target customers, no matter which channel they engage with, whether it be through their financial planner, through their superannuation fund, or indeed directly themselves, there is a channel solution across our yield, alpha, and solutions platform to meet their need. Let me talk you through how we plan to turn this strategy into action. We will be innovating by creating new products and solutions across the broad reach of our capability set. We've got a strong track record of product innovation, which you can see on the left in this slide from within our business units. In 2022 and beyond, we will be designing products and solutions from across our business lines to bring new ideas to market. Some of these concepts include the Challenger Income Series, a range of liquid and illiquid, guaranteed and non-guaranteed income funds designed to meet the income needs of customers with a strong focus on target yield. Continued innovation in our core annuity series to remain market leading in this space. The launch of term deposits under the Challenger brand. The Challenger Sustainable Series, drawing from our boutique investment management capabilities, supplemented with our own investment management expertise to meet the rising demands of customers for ethical and sustainable investment options. Expanding our reach into global markets where there is demand for our capabilities and where we operate today, whilst continuing to participate in DB buyout and reinsurance opportunities. Expanding our established Index Plus capability to provide fund returns with a guaranteed level of alpha, appealing to institutions who are meeting the Your Future, Your Super obligations. Now, this is just a snapshot of some of the concepts currently under development, and we are excited to work together as One Challenger to meet the needs of our customers using a group-wide approach. In summary, the Challenger brand is strong. It is well positioned to capture a broader need of opportunities for our customers and our channel partners. As the demographic trends work in our favor, we will continue to strengthen the Challenger brand by standing for more. The Challenger capability set is unique with a Funds Management, Boutique Life Company, and a B ank. We can draw from all of these to create solutions to solve customer needs all the way from the mass customer through their super fund to the high-net-worth customer who wishes to invest themselves. We have established a strong presence in the Australian market, but we will increase the penetration by innovating and bringing modern investment solutions to our customers. We will use a solutions mindset to bring tailored investment opportunities to the high-net-worth channel and to partner with our institutional clients to solve large strategic imperatives, such as the Retirement Income Covenant. With the record levels of assets in the market, economic trends shaping the investment demands of customers towards income and continued strength in our primary distribution channels, the conditions are ripe for Challenger to succeed using a group-wide approach. I'll now hand over to Victor Rodriguez to talk you through our yield platform. Morning, everyone. It's great to be here. My name is Victor Rodriguez. I head up the fixed income business within the investment management division at Challenger. Prior to that, I spent some eight years at Aberdeen, most recently heading up the Asia Pacific business out of Singapore. Before that, various investment roles at Credit Suisse Asset Management. As Nick mentioned in the introduction, Mark Ellis and I will now spend some time talking about our yield platform and what that means for our customers. Our yield offering, as everyone knows, incorporates our guaranteed annuity and term deposit offerings, but it also includes our fixed income products and capabilities within this investment management division. I want to talk today about that fixed income business, our very clear competitive strengths, and the exciting opportunities to expand our product range to provide investors, not just institutional, but high- net- worth and retail, with high-yielding alternative income sources. Starting with a brief overview of the Challenger Investment Management business and division, which forms part of the wider Funds Management platform that includes Fidante, our multi-affiliate platform. Challenger Investment Management manages over AUD 20 billion in assets under management, predominantly for institutional clients. More broadly, within fixed income, we manage approximately AUD 16 billion. More broadly, once we include boutiques within the Fidante business, we are indeed the largest fixed income manager in the country. At Challenger, we manage over AUD 50 billion in assets across a range of different products and strategies. Impressively, our team is also one of the largest and most experienced credit managers in the country. We manage funds across multiple strategies for a wide range of institutional clients, including for Challenger Life Company, of course, through the investment management agreement that we have in place with them. The table on the right-hand side here highlights and details the sources of capital managed by our highly capable fixed income team. Business performance in recent years highlights the strength of our offering and market position. We've driven strong growth with FUM up 70% in the last five years, reflecting a number of new institutional mandates seeking a range of different return outcomes. In addition to these separately managed accounts, we've also established in recent years a range of high-performing funds. Touching now briefly on each of these funds. The Challenger IM Credit Income Fund was launched over four years ago with our inaugural institutional share class. We have built from this strong start and now have a wholesale and retail share class in place as well. This flagship fund, with now over AUD 500 million in committed capital, represents a unique offering in the Australian marketplace by combining public market investments, both domestically and abroad, with our market-leading private credit capabilities, so blending the liquid with the less liquid. It has exceeded its annualized return target of cash +3% since inception, while maintaining its required average investment-grade portfolio rating. Achieving such returns alongside such a defensive credit risk profile is achieved by taking advantage of the illiquidity and complexity premiums available through the cycle. Meanwhile, our Challenger IM Multi-Sector Private Lending Fund is open to institutional and high -net- worth investors. As the name suggests, the fund seeks to provide a range of private lending opportunities across Australia and New Zealand. This fund aims to generate a consistent high level of income by harvesting the illiquidity premium that exists in private lending markets and targets a return of cash + 5%. Since inception, when the fund was launched in February 2020, the fund has returned 6.3% above cash per annum, well and truly exceeding its return target. Finally, our most recent launch was the Private Lending Opportunities Fund, a floating rate multi-sector credit strategy focused predominantly on domestic private lending, mezzanine, and junior debt strategies, and available only to institutional clients. The fund targets a return of cash + 8%, and since its December 2020 inception date, has returned 10.7% per annum. It's worth noting that combined, these three funds will exceed over AUD 1 billion in assets under management at the end of this month, based on deployed and committed capital. A very important milestone for our fund range, but only the beginning under the One Challenger banner. Consistent with our heritage and track record in the institutional market, the vast majority of the money we invest in is indeed institutional money. We really want to highlight today the capability and the opportunity to expand into that high- net- worth and retail market that Lucy. Pleasingly, our excellence in fixed income has been widely recognized, and that is now beginning to emerge in the retail space. For example, our Credit Income Fund recently attained a highly recommended rating from Lonsec, the top rating available, and this within only a year of us launching a retail share class and seeking such a rating for the very first time. Touching now on the different types of assets we invest in within the fixed income division. We are focused on accessing investment opportunities across a broad spectrum of fixed income credit markets. In fact, as an Australian-based manager, we boast an unrivaled breadth of coverage across the credit universe. Our investments range from relatively liquid, publicly traded investment-grade corporate bonds through to acquisition finance. We're one of the largest managers of securitized assets in the country, where our capabilities extend to private asset-backed lending strategies, including the provision of warehouse lending facilities to non-bank lenders. We are one of the few managers active in this space, indeed, benefiting from Challenger's very long history in that market. We also manage real estate loan investments for a number of clients, bringing a sizable amount of dedicated resources to the analysis of each investment opportunity, working closely with our 40-person real estate equity team. The fixed income portfolio is comprised predominantly in Australian dollars and Australian-based borrowers, but we have extended this to U.S. dollars, euro, and sterling markets, reflecting our wide geographic reach. The size and diversification of our book and client base is also reflected in the differing levels of risk appetite across our client base. This means we are investing right across the risk spectrum through from triple A securitized assets to sub-investment grade acquisition finance deals. As we expand our offering, we will leverage off our significant competitive advantages as a business. Firstly, our market-leading position as an Australian fixed income manager is reflected in the very strong performance track record we boast across the range of portfolios we manage. Over 90% of the portfolios we manage have exceeded their return targets over three years and since inception. We can proudly say that we've had no credit losses across all our third-party mandates and funds since our very first mandate win over a decade ago. Since 2005, including the period of the GFC, our annualized loss rate on private lending is less than 5 basis points per annum. Secondly, our size and scale are a key source of competitive strength. This is particularly valuable in private lending markets where we have AUD 3 billion invested in Australian and New Zealand private debt. Borrowers want to deal with one lender, and that scale provides direct access therefore to a greater range of origination opportunities. We've invested over AUD 250 million in single transactions. Over a third of our deals are bilateral in nature, and when we are participating in syndicated transactions, we're often the very largest borrower and the lender, I should say, and therefore able to negotiate terms. Importantly, our clients benefit from a robust governance framework with significant regulatory oversight. This is a really important point in what can at times be a far less transparent market when it comes to private lending and where new competitors are only just starting to emerge. Uniquely for an investment management business, this governance framework includes an independent credit risk management team positioned within the Challenger Group designed to independently assess downside risks and limit losses. We also boast a highly experienced, deeply resourced team that I'm proud to lead with an average of 15 years industry experience and ably supported, of course, by the wider platform we have at Challenger. Our long-standing history and record is unrivaled in the Australian market. We're the only institutional private lender in Australia with pre-GFC experience, and indeed have been continuously active in Australian private lending market for 17 years. Our extensive experience, therefore, extends to working through different credit cycles. Indeed, a relatively benign economic environment can sometimes mask the effectiveness of truly effective underwriting standards and risk management. The experience of managing through downturns should not be underestimated. Turning now to some market themes that we think represent significant opportunities for our business. Firstly, amidst the increased inflationary pressures globally, we have seen much more hawkish central banks and market pricing in much higher interest rates, including for the RBA, of course. Market volatility has increased therefore as investors also grapple with growing fears of recession and an uncertain outlook for corporate earnings. Against this backdrop, however, private credit in particular can provide investors with strong downside protection underpinned by floating rates and secured and covenanted investments. Secondly, banks, despite them dominating that non-retail lending market, changes to prudential and accounting standards as well as changes in business models following the Banking Royal Commission is resulting in banks becoming less competitive in selective parts of the market. Areas such as sponsor-backed corporate lending, transitional commercial real estate lending, and subsets of the pre-securitization asset finance market I mentioned. This has created opportunities for alternative lenders such as ourselves to provide new sources of funding at attractive rates of return. At the same time, for our customers, private lending strategies have the potential for higher income and returns and can help clients diversify beyond their exposure to publicly traded and listed markets. Thirdly, a growing number of private companies seeking to fund growth is driving increased demand for debt funding. Borrowers want speed, certainty, and flexibility, and are willing to pay a premium for it over other lending alternatives. Private debt markets are also an attractive source of funding for smaller corporates or those who are unable to access liquid capital markets. Catherine touched on the Challenger Income Series. The growing demand for products that provide high yielding, high income solutions is a significant opportunity for our business, which is represented in the white space you can see on this slide. Expanding the Challenger brand across our income products allows us to leverage that brand and capability to develop more products that will meet this growing client need. Earlier in my presentation, I took you through a range of funds we offer currently to our institutional and retail investors that form part of this income series. These provide investors with target returns of cash + 3% to 8%. As you can see from this slide, our product offering currently includes guaranteed income, defensive income, and higher income alternatives. Our guaranteed solutions are largely targeted towards retail customers, whereas our investment management solutions today have been focused on institutional investors. The opportunity now is to bring this existing capability and expertise to more customers. Our focus effectively is on seizing this opportunity to play in the white space. This will include expanding beyond our primary institutional client base with products structured to also reach the high- net- worth in retail markets. We're also extremely well-placed to capitalize on this opportunity. We have the experience and capability across the firm to develop across all these risk return points, which we will leverage as we look to expand our offering across a greater number of channels. We've talked today about the significant opportunity to expand our yield product and meet the broader needs of a much wider range of customers. How will we achieve this? Firstly, CIP Asset Management will soon rejoin the Challenger brand as Challenger Investment Management, something I'm particularly excited about. This change is driven by our plans to target a broader customer base than we do today with our investment products and solutions. Leveraging that Challenger brand and our strong reputation in investment management will see us expand from a predominantly domestic institutional manager to one that targets that wider customer base, providing high-quality income generating products for retail and wholesale segments. We'll also build on our best-in-class asset origination and investment capability to develop a broader suite of products and solutions to meet the needs of more customers. Building on the strong foundations we have built with institutional investors, we will also look to expand our advisory and referral relationships, not just with a broader range of investors and institutional clients, but indeed with stakeholders at Challenger as well. In summary, at Challenger, we have a very well-established fixed income platform, boasting a long track record of success, investing in credit markets and serving institutional clients for nearly 20 years. Our leading fixed income investment capability, in my biased view, is second to none, particularly when it comes to private credit and securitization markets. At the same time, there are some important structural tailwinds that are helping to increase the investment capacity of our business. It's clear that investors are seeking yield through a range of assets and where they can still retain a level of capital stability amidst the market volatility that we're currently seeing. The One Challenger approach we've talked about today will allow us to widen that distribution platform more effectively, leveraging the Challenger brand to bring a wider set of income solutions to a broader range of customers. Thank you for your time. I'll now hand over to Mark to talk us through the significant progress we're making in our Bank and how this business will further enhance and expand Challenger's yield offering. Thank you. Thank you, Victor. Good morning. I'd now like to turn the focus to the banking business. I'll start with a brief introduction of myself. I've had many years in banking. I've worked onshore, offshore. I've worked for investment banks, domestic banks, and in senior leadership capacity in a number of banks as well. I came across to join Challenger in July last year on acquisition of the Bank. Let's now turn to the banking business in itself. What is it? Why did they buy it, and where are we at in terms of the development with it and the integration into the wider business? Very importantly, this Bank is a digital Bank. What does that mean? It's a cloud-based offering, and its banking platform is delivered under a SaaS model. Now, that all sounds very sexy, but what does that actually mean? It means if you want to drive volume and product development, you can with that technical capacity, really important. This isn't about just buying an ADI license. It was about buying capability. Really, really important. On acquisition of the Bank, there were 18 FTE. There's been significant investment, both in terms of capital contribution by Challenger, but also in terms of FTE growth. We've got approximately 42 staff in the business now, and we have developed our full treasury capability. We have developed a non-retail lending capability, and we have also developed a product management team that works very closely with Lucy and Catherine on the broader product distribution. We've got a capable Bank stood up in approximately 10 months, which is quite extraordinary. Let's turn to the strategic rationale. Why did Challenger buy a Bank? Now, if you think about the term deposit market, it's a massive market. We're talking here AUD 780 billion. It's probably closer to AUD 1 trillion. The reality is it's a product market that's deep. It's well understood in Australia, and I would suggest most Australians, in some shape or form, use deposits. In particular, our target markets of high- net- worth and affluent would be very, very familiar with those products and something that we are very keen to support them with. What will we do with the Bank? We'll use it as a direct-to-consumer channel to attract new customers. But we will importantly expand the distribution platforms that we operate on. Challenger, as Lucy explained, has significant coverage across the retail advice platforms. Those distribution channels, while they're wholesale channels, are something that we can align a TD product alongside an annuity product. Both annuities and TDs are very, very similar in nature and style. Probably the only significant difference is the annuity is guaranteed by Challenger, the term deposit is guaranteed by the government. What will that do? It'll allow us to access a broader cohort of customers and also different number of platforms. We generate all these deposits, and then you ask the so what question, which is, "Well, what are you going to do with all these liabilities that you're putting on your Bank balance sheet?" This is where Victor comes in and his team. We will be leveraging, in one instance, Challenger capability in the lending markets. They have Victor and his team have very deep experience in that, in that area. As part of our non-retail lending team that we've developed, we'll be working with Challenger to originate lending for the Bank balance sheet. That will support the delivery of well-priced TDs. Can we just move on to the next slide? Thank you. What does the Bank look like today? It's well integrated within the Challenger system. We have embedded the Bank within the Challenger business. In terms of leveraging HR capability, various other systems, operational capability, we have integrated that. Same with the technology piece and the reporting that's required. We've been doing a lot of work on expanding the channels, the distribution channels, and I'll talk more about that on the next slide. In the very first instance, we've been testing the direct-to-consumer channels. We targeted two sites, Mozo and Canstar, approximately five, six months ago, and we have been delivering TDs on those sites. We've been adjusting pricing to test demand. It's important that we also test the straight-through processing capability of the Bank. It's pleasing to report that despite the name, which we are looking to bury in about a month's time, that we have been able to attract consistent flow of deposits and a consistent number of depositors. Approximately 150 new customers a month and about AUD 20 million in deposits. It's small, but we have been testing it under that brand. The lending capabilities, as I have mentioned, we have stood up a non-retail lending team and operations team. We have also received regulatory approval to commence SME, CRE, which is commercial real estate and corporate lending. In June, we will be closing on the first series of corporate lending transactions. In regard to the SME capability, we have entered into an exclusive broker referral arrangement within asset financing business, and that will generate flow of auto financing and plant equipment financing transactions. In June, it's a pretty exciting time. We will have the SME and corporate lending activities live. Really, really exciting time. Importantly, and this is the linchpin as the last point, is the rebranding to Challenger. Coming under the one Challenger umbrella, we have spent an inordinate amount of time and effort over the last six months, particularly, on rebranding to Challenger. It's actually quite a big piece of work. That is on target to go live in the last week of June. Once we have the rebranding in place, we can then look to drive the deposit volumes far more significantly than what we've been doing to date. If we move on to the next slide, please. Now I'd like to turn to what do these distribution channels look like? As I've mentioned, in the early stages of our evolution, we have been developing out the direct-to-consumer sites, Mozo and Canstar. We won't stop with those. We will look at other sites. They are the two big ones that work within the marketplace. I'd encourage you to check them out. You'll find that the pricing sits at, not at the very top, but certainly in the top tier. We're sitting alongside AMP Bank, Macquarie Bank, what have you. We will expand that. Importantly, it's the next segment, the intermediated segment. Again, this is something that Lucy spoke about at length. It's the intermediated. Two parts to it. One is retail broker and the other component is the retail advice platforms. Retail broker, we have been working exclusively with Australian Money Market to bring that channel live. We're on target to bring that live in June as well. The reason it's taken so long is that we're building an API between the Bank and AMM so that we can again deliver deposits on a straight-through processing basis. Very, very light human touch. Allows you to scale your business. The next segment will be retail advice platform. We're well advanced on the work there. The one twist with the retail advice platform is the requirement to have an external rating. We have started that process. That will take some months, as any of you that are familiar with the rating agencies. Once we have it, we will then be able to launch on the retail advice platform. That's targeted for later this year. The end goal, and this links into the broader Challenger network, is to move into the institutional space from a deposit perspective. We'll leverage the rating, and we will also target super funds, other super funds, major banks, what have you. Curiously, since the Bank has been bought, and this gives you some idea of the strength of relationships that Challenger has, we have received reverse inquiry for other institutions to put deposits with the Bank. The deposit process is well advanced, and it'll be a series of stages that we roll it out over this next 12 months. We just go on to that final piece. The Bank is core to Challenger. This isn't about Challenger getting into banking because it wanted to own a bank. It's not about banking per se. It's very focused on the liability side of the balance sheet, the TDs and how it augments its existing business. We will look to leverage Challenger capability on the asset side as well to support well-priced TDs. We'll also look to continue building out the customer offerings. We've talked a lot about TDs. It's the first step. There are other products that we're considering in terms of development, both on the deposit side or the savings side, and also on the asset side. We will also continue to leverage Challenger capability and also use our own origination capability that we have stood up. The Bank, over the last 10 months, has been assimilated into Challenger world. It is being built out for capability to deliver into the Challenger strategy. June is an important month for us. A number of initiatives that set us on the first step in our journey as we develop our banking business. Thank you very much. Thanks, Mark. We're on time, which is a good thing. We'll take a quick break here for 10 minutes. Recommence at 10:25AM, if we can come back into the room by then. For those of you online, you'll receive a notification before the presentation recommences. Thank you. Great. Thanks. Well, welcome back everyone, and thanks for being with us again this morning. I'm going to spend some time now providing more detail on our strategic partnerships and how they're going to help us further diversify our business and our customer base. I'm going to discuss our relationship with Apollo and how it's going to contribute to our wider plans to grow our Funds Management and Private Lending capabilities. Stu Kingham is going to talk to us about our proposed new joint venture with SimCorp. Challenger has a strong track record of building enduring and value-creating strategic partnerships. These partnerships will continue to be an important part of our strategy as we look to diversify our business, generate scale, and drive growth. Firstly, our long-term relationship with the MS&AD Group, a leading Japanese provider of foreign currency Life products with a strong and powerful brand. It has diversified our distribution channels by giving us effective access to the Japanese market. Apollo are now Challenger's largest shareholder, and since they've come onto the register, we've been speaking to them about opportunities across a range of topics that will take advantage of our common purpose and ambition and leverage their truly global capability and scale. Of note, we're making good progress with our plans for a joint venture to build a leading lending platform in Australia and New Zealand. Today, we've also announced a new partnership with SimCorp, who have been providing Challenger with our core investment administration technology platform for 17 years. This is an exciting opportunity, and it will allow us to leverage their leading technology platform, and Stu's going to talk to that, after I do, shortly. With these three complementary relationships across annuities, asset origination, and technology, we're well-positioned for future growth. It's worth spending a few minutes on our long-term and highly successful relationship with the MS&AD Group. The relationship began six years ago with a reinsurance arrangement for their Australian dollar Japanese annuity business under the MS Primary business. We further expanded that relationship to become a truly strategic partnership in 2019, when MS&AD took a larger stake in our business and joined the Challenger board. We've subsequently begun reinsuring U.S. dollars via, again, the MS Primary business. MS&AD is an enduring relationship that demonstrates our ability to generate real value over the long term for both parties, and it's reflected in that book size, which is now AUD 2.3 billion on the Life Company's balance sheet. Our two companies engage extensively across a range of topics, including product development and partnering opportunities. Illustrating this, I'm very pleased to report today that in the past year, our CIPAM real estate business was given a mandate to buy Japanese shopping centers on behalf of MS Primary. This has the potential to bring significant growth for our business and is a further reflection of the strength and breadth of our strategic partnership. Moving to Apollo. As Nick mentioned at the beginning of the presentation today, we have a significant opportunity to leverage our investment and origination excellence with the aim of growing our Funds Management and Private Lending capabilities. In response to this, we're pursuing a number of exciting initiatives. In investment management, we continue to strengthen our alpha capability, including the addition of Cultivate to our stable and with a strong pipeline of future opportunities. We also have a significant opportunity to continue to build our relationship with Apollo. At present, we're working together on a range of opportunities to help customers achieve financial security in retirement and to deliver meaningful value for shareholders. To give you some color on this, the initiatives we're discussing include investment opportunities for us to reinsure life risk, and as well as products and distribution partnering opportunities, and the potential joint venture which we shared with you earlier this year, and which I'm gonna share a bit more with you now. To spend a bit of time on the potential Apollo joint venture. From our discussions over a number of months, it's clear that both businesses share strong complementary skills and capabilities, and we'll look to leverage these as we look to pursue the joint venture opportunity. For example, Challenger is Australia's largest fixed income manager, an area in which Apollo brings significant global capability and scale. We also offer similar products, albeit tailored to our respective local markets. Challenger also has a premier active Funds M anagement business in Australia with a deep knowledge of our clients and needs. Building on these capabilities, we are progressing discussions with Apollo to establish a lending platform in Australia and New Zealand. We see that there are some underserved segments that are looking for better solutions and support. Victor has well highlighted our deep knowledge in these markets and our experience providing funding to Australian businesses for over 17 years. Added to this, Apollo brings their truly vast experience in offshore markets and that global scale. The JV opportunity will also benefit from our broader capabilities across the Group. For example, our well-established operating platform. It will also provide business diversification to the Group. Consistent with Victor and Mark's discussions on the yield solutions, the JV will be an important channel for alpha generating fixed income. By way of progress update, the teams are working diligently to ensure the foundations of the potential joint venture are strong, and this includes work around structuring, around tax, and regulatory considerations. In summary, we continue to engage very productively with Apollo, and we look forward to updating you as we progress on a range of opportunities for the benefit of our customers and our shareholders. Thanks, everyone. I'm going to hand to Stu now, who's going to give us an update on the JV with SimCorp. Stu. Thank you, Chris, and good morning, everybody. It's great to be here today in my new capacity as Challenger's Chief Commercial Officer. It's a role that I'm really enjoying, and it's one that lets me work right across our business. I'm pleased to be sharing a new initiative today, a new business that we're building via a partnership with a technology leader. It's a business we're already in, investment administration. It's a core capability we have, and it's one we're really good at. We're building a platform to make it available to others. We're creating an investment administration as a service platform. It'll leverage a unique opportunity in the evolving Funds Management industry. When coupled with our competitive position, we're well-placed to benefit from these trends. In investment administration, scale really matters, and this initiative goes right to the heart of it. We think it'll be incredibly successful as it scales and delivers value for both our clients and shareholders. As mentioned, investment administration is an area we have significant expertise in. We already provide these services to a range of boutique clients today, as well as supporting our Life business. In partnership with SimCorp, we're extending this capability and will make these services available to external clients. We'll provide clients with a unique cloud-based administration system. We're really building an ecosystem. We're gonna service both asset owners and asset managers and do it in a really efficient way. This initiative is really aligned with Challenger's approach to working with strategic partners that's helping to grow and diversify our business. Let me share a little bit more. The Funds Management market and investment markets are continuing to evolve and change. Regulation is increasing. Reporting requirements are becoming more onerous. Asset managers and asset owners are expecting more, as are investors. They're demanding exclusive, private alternative investments. ESG is accelerating. Investment operations, as a result, is becoming more complex. The industry is trying to reduce costs, drive efficiencies, while focused on generating returns for their clients. It's extremely challenging for both asset owners and asset managers to extract the same scale benefits that they once enjoyed. The industry response, consolidation and mergers, and there's a move towards outsourced administration models. We're really well-placed for this. We have over 40 years of experience, and we've developed significant investment operations expertise. Like the industry, we too have been reviewing our approach, and it's clear to us that Challenger has a very strong capability, and it's a real competitive advantage of ours. We are committed to operating a single cloud-based front-to-back administration system, operated here onshore, providing the best outcomes for our clients. It'll support their business growth, but also our own growth ambitions. We do recognize the need that we're going to need to invest in order to maintain our competitive advantage. The best way we can do this is by offering our full capability to third-party asset owners and managers, all via a cloud-based platform and in partnership with SimCorp. Our new joint venture will leverage the capabilities of both businesses. Over the last 17 years, we've built a really strong and collaborative relationship with SimCorp. They're a world-leading provider of investment cloud-based solutions with over 300 global asset managers as clients. They're a natural partner for us, and we're just taking our existing relationship to the next level. We already operate a full front-to-back system, and it's powered by SimCorp. It supports 18 clients today and AUD 100 billion of assets. However, what's unique is the complexity our administration offer supports. We support a wide range of clients' needs today and importantly, a significant proportion of private market investments. One-third of the fund we administer is private markets. Private markets are far more complex to administer. Processing over 2 million transactions a year across most asset classes, both private and public. SimCorp will continue to be a great partner as this space evolves. They invest over EUR 100 million each year in research and development, employ over 800 software engineers. They're focused on remaining a global leader, and we're going to partner with them. What will the JV deliver? Through this partnership, we're gonna move to a fully integrated, technology-led, cloud-based solution. We'll be able to bring new managers and new products to market really quickly. We'll be able to support clients as their business grows and their needs shift in an evolving market. The partnership will ensure clients have the latest technology. They've got the latest digital tools, the latest performance analytics. We will provide them administration peace of mind, allowing them to focus on what they do best, manage, not administer the money. This is a new business for Challenger. It provides diversification. It'll generate fee-based income. It'll allow us to fully capture the benefits of scale, while at the same time, it'll enhance the customer experience. We are bringing together a technology leader with an expert operator to create something really compelling. It'll be an Australian first. The first fully technology-led, integrated, front-to-back, cloud-based admin platform that's available for hire. It'll be independently branded and locally operated by our experienced team. Today, we've announced David Bell will be the chief executive of this new initiative. He's moving from Challenger's Group Chief Operating Officer. We've got a search underway for an independent chair for this new business venture. It'll be majority owned by Challenger. We've got the people, the operating systems in place, and we're the foundation client. SimCorp will contribute the technology and other services to support its growth. Together, we'll create a market-leading platform. The launch of the business is imminent, and we're also well underway talking to potential clients about this opportunity. For our existing clients and boutiques, nothing changes on day one. We start the transition to the cloud. We'll be enhancing their capability and providing them with more functionality. We're allowing them to benefit from this technology on day one. We are an investment manager. Investment administration is at our core. Establishing a market-leading platform is completely in line with our strategy. With cloud-based capability, we can bring new products and new markets and new managers to market quickly. It'll broaden our customer access and expand our product range, and that's something you've heard the team talk a lot about today. Through this platform, we'll capture the benefits of scale and the operating efficiencies, not just on the fund we manage, but also on the fund we administer. It'll tilt earnings towards fee-based income and diversify our earnings base. We expect to build significant scale in this business relatively quickly. As Chris mentioned, we've got a long track record of building and leveraging partnerships. A good example is our boutique investment managers, which date back well over a decade. More recently, we've built really strong global partnerships. Each partner brings a unique and a compelling offering. MS&AD, access to the Japanese annuity market. Apollo, helping us generate better returns for our clients. SimCorp will power investment administration. Each partner is a global leader in their field. All three support our growth and our diversification strategy. Our business is well-positioned to capture the opportunities ahead. We really look forward to coming back to the market and providing further updates as we build and scale this new business initiative. I'd now like to hand over to Pete, our Chief Investment Officer, to run us through the Life investment portfolio and outlook. Thank you very much. Thanks, Stu. Good morning. It's great to be here today. I've been in my current role for nine months, and more broadly, have been with the business for over 18 years, previously leading our Life risk business as well as our real asset portfolio, and prior to that, leading the asset and liability management function. Challenger Life is a well-capitalized business. We are operating at the upper end of our capital range and are well-placed to withstand market volatility, as well as take advantage of investment opportunities as they arise. The increase in volatility has driven credit spreads wider, with the upward movement in rates supportive for both new business sales as well as profitability. In respect of asset allocation, we're not planning to make any material changes for the FY 2023 year. There is no change in our target PCA ratio range or preferred operating level, with the PCA ratio at the end of April standing at 1.61 x. The key driver of the movement from March, where the ratio was reported at 1.65, and the current ratio has been the depreciation of the Australian dollar. From a portfolio construction perspective, we have restored our sources of liquid capital post the repositioning of the portfolio from events in March 2020. To improve financial flexibility and diversification, we are looking at further investments into the alternatives portfolio, which are uncorrelated in nature, but are also liquid. I will now outline some of the key market themes we are seeing and why our business is well positioned to take advantage of these changing market conditions. Firstly, we have an environment of high inflation with sharp increases in yield priced into the market. Russia's actions in Ukraine are exacerbating these already high inflationary levels. It's evident that central banks will need to wind back the accommodative monetary policy settings. This may have growth implications and may impact asset prices if this is accelerated beyond current projections. Importantly, Challenger Life remains hedged to passive interest rate and inflation positions, including hedging of our property portfolio. The increase in rates and widening of credit spreads is supportive to both new business sales and profitability. There remains a risk of a deeper economic downturn. Should this occur, as always, we will carefully manage our capital position with the increase in exposure to liquid alternative investments, increasing our flexibility to respond to such an event. Outside of economic conditions, the other key theme that we are seeing is the increase in competition for private assets, with further entrants and competition expected into this segment going forward. It remains important to ensure that Challenger Life has a continued access to private asset origination. In that regard, we continue to closely manage our existing relationships under Victor and his team, which in many cases have extended beyond 10 years. This will enable Challenger Life to continue to extract an illiquidity premium out of its debt investment portfolio. This chart is probably familiar to most of you, I think it's been rolled out at every investor day, and outlines where Challenger is seeing current risk premiums across the market. Explaining the chart. The horizontal blue bar represents where we've seen the average risk premium since 2000 across our key asset classes. The dark blue box represents ±1 standard deviation of return. The green square represents where we saw risk premium this time last year, with the blue diamond representing where we're currently seeing risk premium, and the red vertical bar representing the historical range of risk premiums since 2000. This highlights that credit spreads have moved wider, with a contraction in property and SME equity risk premiums over the period. Overall, risk premiums are now close to long-term averages, with a widening of credit spreads supportive for new business profitability. In respect to asset allocation, as highlighted, we are not looking to make any material changes for the FY 2023 year. As outlined in our financial reports, we had a large property asset that was available for sale. The proceeds from this property actually hit our account yesterday. These proceeds will be reallocated across other asset classes, primarily to further exposure to insurance-linked securities and absolute return funds within our alternatives portfolio, given their uncorrelated nature to markets, as well as relative value and underlying liquidity. Within the debt portfolio, we plan to further down-weight our exposure to investment-grade corporate credit and increase our exposure to asset-backed securities and private debt, given the relative value outlook. Importantly, within the fixed income portfolio, we will continue to target a minimum of 75% investment grade. We plan to also reallocate some of our low beta exposure, being our equity collar positions, into unlisted equity investments. From a property perspective, a key focus for the real estate team will be leasing activity on our multi-tenant CBD office assets. The remaining portfolio remains resilient in nature, with a weighted average lease expiry of circa 5.5 years. We are not expecting any changes in capital intensity across our key asset classes for FY 2023. After review, there will be no change in our normalized growth assumptions for the FY 2023 year. Given the market outlook, I will now outline what this means for ROE and margin at Challenger. The increasing rate environment will support both an increase in ROE and margin. Importantly, this may take some time to season through our portfolio, particularly in respect of our exposures to property and equities. The increase in volatility has enhanced new business profitability. We are aware of market conditions and will continue to manage any mark-to-market volatility that may emerge. Managing risk has always been core to the investment process, and this remains so. We have seen the benefit of running diversified investment strategies over the past few months, and we'll continue to look to add diversification to the portfolio where it makes sense to do so. Overall, current conditions are supportive to both ROE and margin. Challenger Life remains well-capitalized to withstand market volatility, as well as take advantage of investment opportunities as they arise. In closing, there are a few points I would like to reiterate. Challenger Life remains a well-capitalized business. This ensures we are well-positioned to take advantage of investment opportunities as they arise, as well as withstand market movements. While there has undoubtedly been an increase in market volatility, we are in a very good position. The movement in rates will support new business sales, and the widening of credit spreads will support forward-looking profitability. We do not expect to alter asset allocation for the FY 2023 year. Thanks for your time. I'll now hand back to Nick to conclude today's presentation. Well, thank you. Thank you, Pete, for the update. Thank you also to the other presenters, to Lucy, to Catherine, to Vic, to Mark, to Chris, and to Stuart. As you've heard today, we have a really strong core, and our business is positioned for growth. By prioritizing our product development, by prioritizing our investment capability and our operating platform, we'll build on our current position of strength. What will all this achieve? At a high level, we aim to protect and to grow our core franchise, to accelerate FUM growth, to capture the scale benefits, and to increase fee-based income, diversifying our earnings while maintaining a strong capital base, all with the ultimate goal of enhancing shareholder returns. The four key growth opportunities we've discussed today will help deliver these outcomes. Meeting more needs of more customers. Bringing a broader set of products. Addressing clients' demands for yield. Our partnership opportunities with Apollo and SimCorp, all of which combined present a really exciting set of growth opportunities for Challenger. Turning to our FY 2022 outlook. Challenger remains on track to meet full year guidance with normalized net profit before tax expected to be at the upper end of our guidance range. As Pete noted, we continue to target to an ROE of RBA cash + 12%. Reflecting the board's confidence in our business, we continue to target a dividend payout ratio of between 45% and 50%. Underpinning our growing successful franchise, we have a strong balance sheet and sustainable capital settings. Our business is strongly capitalized today with a Life PCA of 1.61 x, as Pete noted at the end of April. Challenger is a strong, well-regarded business that has a significant opportunity to meet a wider range of customers' needs. We will diversify our business, expand our brand, and deliver more products across a greater number of customers. We'll leverage our competitive advantages executed by our very talented team and ultimately aim to enhance shareholder outcomes. I wanna thank you for your time today for the presentations. I'm now going to invite members of the leadership team and some of the speakers to come to the stage and ask Mark to lead us in a Q&A session. Thank you. Thanks, Nick. We'll now turn to Q&A. We've got a good panel up here for you today. As a matter of protocol, we'll be taking questions from the room first, followed by online. For those in the room, we have a roving mic, Nicole here. So please raise your hands or hand, sorry, and we'll get to you. If asking a question, can I ask you to please state your name and the company that you represent. For those of you online, please submit your questions. I can see them coming through as we speak. We'll take the questions from the room first and then follow the questions online after. The first question from Simon. Hi, Simon Fitzgerald here from Jefferies. Just three questions here, and I'll ask them one at a time. Firstly, the private credit platform, there's talk about different parts of the business accessing that platform at once. So obviously the Life Company, but Challenger Investment Management, the Bank, as well as the Apollo JV. I'm interested to get a bit of clarity in terms of when a credit comes down the wire, like which sort of section does it go into? Because there's an inherent management of conflict of interest there. I'll ask the other two questions after that. Thanks very much, Simon. I might make a few comments, and I'm looking at Victor here, who might also like to add a couple. You know, traditionally, the CIPAM fixed income team has provided asset origination for both the Life Company and a really broad range of institutional clients and also into the funds. Within the business, there's some very strict protocols that are established around allocation policies for credit, and that won't change with the Bank. It just extends those protocols to ensure that we are, you know, meeting our obligations to each of the clients' requirements. I don't know, Vic, would you like to add to Simon's question there? Sure, yeah. Just to clarify or add to Nick's comments, we manage the Life Company's private credit investments through the IMA that we have with them. The JV also brings an increased opportunity by targeting specifically SME lending opportunities, whereas we tend to be more institutional and wholesale in terms of our lending activities. Really viewing the two as complementary. Mark touched on the Bank that we will, through referrals, be providing some opportunities to the Bank, but you know, very strong risk governance and compliance practices in place to ensure that those conflicts are properly managed. The really new thing of all that is really the JV and the opportunities that creates. Like I said, that's going to be complementary. Second question relates to just exposure then leverage to interest rate rises. You've spoken before about the shareholder capital portion being invested or is non-hedged. Can you just sort of confirm whether how that is invested relative to the Life Company's exposure and fixed income? From memory, I recall that it was mainly invested at the shorter end. Yeah. Simon, thank you for the question. Given it's specific to the balance sheet and Pete's on stage, Pete, I don't know if you would like to pick up that question. Yeah. I outlined in my presentation that we are, you know, hedged to, you know, passive interest rate and inflation exposures. You know, where we've got a true asset class that is interest rate sensitive, and I'll put fixed income into that bucket. That's fully hedged back to a floating basis, you know, regardless of duration. I did mention the fact that, you know, the benefit of rising rates in terms of earnings margin and ROE may take some time to come through, and that's more in respect of our property and equity exposures. You know, obviously, we've got contractual leases coming out of our property. The increase in inflation may take some time to flow through to market rents, et cetera. You know, we do expect that is not a linear relationship, but it will flow through the portfolio over time. At least that shareholder's component that's invested in fixed income, is it invested the same way as the policyholder or the annuitants? Yeah, we don't take any duration mismatches within the portfolio, so it all gets, basically all gets hedged back to a floating basis. Yep, the final question, again, just, you know, sort of thinking about rate rises. I remember that the Liquid Lifetime product had an option that allowed annuitants to pull their money out at choice. Thinking that, you know, that might be expected a little bit more if, you know, in a rising rate environment, that potentially they might want to put their money in something that's a bit more high yielding. But at least I recall that there was also an option on that Liquid Lifetime product that, you know, sort of valued the potential of annuitants pulling out their money. Was just interested to know when the last time that option was valued, and just to confirm that it is on balance sheet as a liability, if I've got that right. Thanks, Simon. Pete, did you want to take or Catherine make some comments? I can take that. Yes, it is. It's something that is valued. You know, I guess in terms of the reinvestment, I might hand over to Catherine. You know, we're definitely showing, you know, we fair value all our assets and liabilities, including any optionality within our annuity portfolio. Thanks, Simon. We're not currently seeing customer inquiries come through looking for the withdrawal of their money to reinvest at today's rates. It's something we've prepared the sales team for, but we haven't actually seen it come through yet. Very pleasingly, we did launch the market-linked lifetime annuity. We went to market with that in March, and we've seen a pretty strong engagement from the industry on that. Advisors now have the full choice for their customers about where to invest. Hi. Hi, James Georges from Credit Suisse here. Just a question on credit spreads. You've obviously mentioned that they will start to benefit your ROE margin. It'll take some time to flow through. Can you just maybe give us a bit more color as to when that might start to benefit your ROE margin? Maybe you could let us know where front book margins are versus the average of the book. Yeah, James, thank you for that. Clearly the strategic side of the presentation will come second in the questions to the interest rates. I think with front book economics, as Pete laid out, and I'm sure he'll like to add to this, you know, we review the assumptions, and we're not making any change to that. There's no change to the asset allocation. We have an ROE target of cash + 12%. Pete made comments that, you know, this environment where we've seen very steep changes in interest rates all through the swap curve is allowing us to be disciplined around our pricing, as I'm sure you've observed. It's also providing investment opportunities for us in the market which didn't exist before. Pete, did you want to add to those comments? Not too much further, Nick. I mean, you know, definitely we're seeing much better opportunities than, you know, standing here 12 months ago. You know, the widening of credit spreads and, you know, it's important to note that the chart that I put up were index-based risk premium. We are seeing, you know, sections of the market that have moved wider than other sections. You know, Vic and his team are, you know, very excited by the opportunities that they see. You know, our forward-looking profitability at this point in time is very attractive. All right. Thank you. Just another question on Bank term deposit pricing and annuity pricing. I mean, and maybe this is for Mark Ellis. You know, you mentioned that you'd been testing pricing to see what the elasticity of demand was like. Are you able to provide a bit more color on the feedback there and where you think you're going to sit? And I guess, you know, looking at your current rates, the TD rates are around 3.3.4. Annuities for three-year are around 4%. So, you know, firstly, like, where do you think you want to sit on TD pricing versus the market? And why, you know, are term annuities priced at such a higher level, and can you pull that back to retain more margin? I might make just a couple comments, Mark, before you lob in. I mean, if you step back from all this, what we spoke about at the 3Q was that we had obtained lending approvals and we'd established the lending platform. We were maintaining a lot of discipline around attracting deposit flow onto the platform. Mark and the team have built those relationships into Mozo and Canstar and the testing is to check the elasticity, as you'd expect, without trying to take on too much in a period where we're still building the lending platform and we're pre-changing the brand, et cetera. As you're aware on the Life Company side, you know, we price our annuities over swap, and so we've talked about pricing. Pete's actually just made all the comments really about pricing, just then. They are two different, you know, end markets potentially from a pricing perspective, and each side of the business will have its own, you know, independent pricing committee. Mark, I don't know if you'd like to add to that. Yeah, thanks, Nick. Just a couple of points. The first one is that the pricing testing we've done has been done with a brand that is unknown to the marketplace. We've been looking at how we can generate flow, where we need to sit in the stack. We've moved the price from sort of third equal to top, back to second. What we don't know is what the pricing with the Challenger brand behind it will do in terms of volume. That'll be the next step. With the rebranding occurring in June, we will then take that as an assessment, and we're also looking at the curve as to where we're going to sit. I mean, we've largely focused on one-year TDs at this stage, but clearly based on the rise in interest rates, you know, we will need to consider shorter tenors and those sorts of things. There is a lot of work still to be done in terms of building out that proposition. Thank you. Good morning. It's Andy Chuk from Macquarie here. Just two questions from me. The first one is on slide 55 with the asset allocation targets for FY 2023. I just want to clarify, is that a FY 2023 exit target, or is that an average throughout the whole year? It's our target for the end of FY 2023. Fantastic. The second one is just another quick one as well, just around rental abatements. Just want to confirm if they're all finished now, or is there an impact to FY 2023 we should be expecting? I understand that the legislation is now finished in each state, so we're not expecting that there should be any further rental abatements into the FY 2023 year. Great. Thanks. That's all from me. Morning. Kieren Chidgey from Jarden. A couple of questions, if I can, maybe just starting on sort of the broader strategy to expand the customer base and introduce some new products across the company. Which products are most advanced at the moment? You know, what are your expectations, and how are you framing targets for the broader team in terms of sort of growth of AUM or sort of additional customer relationships? Yeah, thanks, Kieren. I'll make a few comments. Catherine van der Veen, I'm sure, would like to add to it. We have set in place the creation of a customer unit, and that was announced, as you will have seen, last week. We have a very significant distribution footprint already across Australia. For us, this is about broadening the products that we're taking in those channels. You will have heard today about affluent high -net- worth. There are areas that we have been developing over the last number of years, and we're trying to line up appropriate type of product to those channels because it is different. That can look like private market strategies. It can look like, you know, Vic spoke about the credit strategies, so there's a number of, you know, immediate opportunities there. If we think across the what we have done just recently, and Catherine just mentioned the MLA, that came to market really only through March, April. Getting momentum on the MLA is a really core priority. A salesperson is better with more in their kit bag than less, and the MLA adds significant breadth to the kit bag, and we'll get more into it for them. Catherine, would you like to add some comments? Thanks, Nick, and thanks, Kieren, for the question. We can be fairly certain that this calendar year you will see more innovation in our core annuity product, which we'll be excited to capitalize on the successful launch of the market-linked annuity in March this year. We will also be launching the term deposits under the Challenger brand, as Mark alluded to, into the retail space. They're in development and into execution at the moment. We are also going to be prioritizing those product concepts on which we have existing capability, and especially with Vic's yield platform, a lot of the componentry is already there. It's just a matter of combining them to bring them to market, so we feel pretty good about the progress on those. Another of the concepts under exploration is the extension of our Index Plus capability, a capability we already have, and that is in strong demand, particularly from institutional clients. Where the concepts require more thinking, we're looking at FY 2023 and beyond, and I alluded to some of those earlier in my presentation. There's really no shortage of ideas at Challenger, and as I mentioned, we're pretty early on this journey. Okay. The opportunity within sort of the yield sort of private markets into high- net- worth in particular and sort of the affluent part of the market is. Mm. Does that require you to build that TAM, or is it? Do you have a sense for how big it is today once you strip out sort of existing retirement and TD type products those institutional investors are purchasing? Yes. Well, we know the size of the income market today in Australia is about AUD 1.3 trillion, and about AUD 1 trillion of that is with ADIs. We think the contestable market is north of AUD 300 million at the moment, which moves every year in the income space. We know that demand in the high- net- worth space is driven by clients who are looking for institutional-grade investments, and you would've seen Victor allude to those. There is a higher tolerance for illiquidity in the high -net- worth space, which means, you know, we can be more expansive about the concepts that we bring to that channel. They're looking for differentiated sources of alpha, and they're also looking at a broad range of structures. It is our intention that we bring when we bring investment concepts to market, we bring them in a range of structures according to the client's preference. Thanks. Just a second question, I guess around some of the ROE implications as we look forward. Maybe just starting on the Bank. Does the Group's RBA +1 2% pretax target extend to the Bank? And if so, what is the time horizon you expect the Bank to achieve that, and what sort of scale would it require to hit that? Thanks, Kieren. Everything we do at Challenger is built off the ROE target of cash + 12%. Certainly the Bank fits into that mold. What we did, as you'll recall, at the half, is to say, "Look, it was taking us longer to get the Bank stood up, and we wanted to do it properly." We used that phrase of crawl, walk, run, and we were delighted at 3Q to talk about the lending approvals having come through, the rebranding in June. Mark spoke about the development of referral programs for other SME lending as well that the team have been working on. The technology looks good, and the integration, as Mark alluded to, in 10 months, they've achieved an extraordinary amount to scale this business. We're not today looking to provide guidance, other than we affirm in the FY 2022, which includes the expense base for the Bank built into it, clearly. You know, we feel really good about the direction of travel, but we'll provide some updates when we get to the full year results. Okay. Sort of a second question around the ROE and some of the high- level commentary, Peter, I think you provided around sort of the improvement in margin and ROE in a higher credit spread and the higher interest rate environment. What sort of impact do you see mix having sort of as against sort of that natural reinflation of your margin, particularly given the good growth you've had in institutional over the last year or two, which is obviously shorter duration, presumably lower margin and maybe lower ROE as well? Peter, do you wanna pick that one? Yeah, I can pick that up. Yeah, definitely we're pricing you know the different products to ensure that we continue to meet our Group targets. You know, to the extent that you know we're writing shorter duration business that can be backed with a you know a narrower asset allocation, that is reflected in the price. You know, we're being very disciplined around our pricing of our annuity products. You know, I think the one point to note is you know from an investment perspective, we're very focused on ROE. The margin will move if you know our mix of business changes. If we end up writing more shorter- term business at that narrow investment margin, then you know the underlying margin for the business may contract. You know, I guess from an ROE perspective, we continue to remain disciplined and ensure that we're meeting the ROE target. The comment around high margins is sort of on a constant mix type basis. It doesn't take into account evolving mix. Yep. Okay. Sorry, just a third and last question on SimCorp. Stu, just wondering if you can give some examples of the type of clients. I mean, you seem pretty confident around the AUM growth you might enjoy through that JV. Just wondering who in particular are the target clients, who they're using currently for their asset admin. Given we are, you know, I think you referenced it, seeing increased demand from some of the big global guys coming into this market to do outsourcing, who have $1 trillion+ of AUM. What sort of differentiates you guys when you've got $100 billion? Great, Kieren. Thank you for the question. What's led us to this decision is we've done a heap of market testing, thinking about our own business. You know, thinking about it is getting far more complex. Everybody we talk to in the market, whether they be a profit-for-member, superannuation fund, a platform operator, an investment manager, right across the spectrum, are having the same challenges. That's led us to do a whole heap of research. What we've found is the competitors in this space are the custodians. They're the State Street, they are the Citigroup, they are the BNY Mellon. They offer a service that is pretty well run offshore, and so it's a labor arbitrage rather than a technology arbitrage. As we've investigated this, we've found two things. We've found, one, those competitors offer an inferior service to what we offer. We're very committed to it being locally operated. We found that, one, the service is inferior. They can't handle the complexity, but also, it's more expensive. The labor arbitrage is disappearing in offshore markets. We've checked and thought about the competitive offering, and we've tested this with a very broad range of potential clients, and the feedback is incredibly clear. It is that we have a cost advantage to the rest of the industry because we've built our business as a front to back already. We know how that operates. We know the service that provides to our clients. We're in a position where with technology enablement, it's incredibly scalable. You know, I don't want to name names, but we are confident, you know, in our position, as we have discussed it with a range of people, even without the business stood up. We've got a range of inbound inquiry, both in the profit for member sector, superannuation fund sector, also in the listed asset manager market. That sort of gives us confidence around that. You know, bringing on new clients will take time and bring scale, but there's significant benefits to our own investment managers as a result of that as we bring in new technology. We're really confident. We're looking forward to keeping the market updated as we build and scale the business. Next stop is to sort of brand the business, transfer our people, and start engaging with potential clients. Morning all. It's Scott Russell from UBS. Can I start with a big picture question on annuities, please? There was an interesting slide there presented on the percentage of advisors who have sold an annuity or at least hold FOA with Challenger, 53%. I would have thought that was relatively low and probably reflects the penetration of annuities across the marketplace. Given the RIC probably didn't have the teeth that you would've liked, I'd just be interested in your strategic comments on how you'll grow the retail channel in the midterm. Any statistics you can share on the number of retirees today that actually purchase an income product of some sort. Scott, thank you for the question. There's a little bit in there. I think there's probably just a clarification around the 53% of FOA that Catherine might like to make in a second. I might make a few comments on the RIC, and I think that realistically could say most retirees take some form of income product between a Bank TD or other type of income strategy. We might talk about that in a second. Yeah, I think in terms of Retirement Income Covenant and hopefully our message is becoming quite clear on this. I mean, our view on the Australian superannuation system is that we've built this world-class system, and the Retirement Income Covenant is one part of the creation of a world-class decumulation system. The risks in retirement are just very different to the risks in accumulation, and the Retirement Income Covenant recognizes that. That is related to the institutional and superannuation sector, and so you could reasonably say that, is there a read across to the retail advisor community? Certainly, our experience in the market is that they are very conscious of the differences between what they need to do for their clients in accumulation and decumulation, and that is growing from the conversation that's happening in the market, the arrival of other players into a market where, you know, for a while we'd probably been the loudest, not maybe the only, but definitely the loudest voice, having more voices in the market talking to advisors about the way to think about you know retirement. The Retirement Income Covenant we see as an enabler to that comment. Catherine, you might like to make comment on the 53% of FOA- Sure. the coverage. Nick, thanks for your question, Simon. We the 53% represents the business across Funds Management and Life. That's 8,000 advisors who actively are serviced by Challenger today, and a total of 9,000 advisors who hold FOA with us. We have about 5,000 advisors who have business with the Life Company and with annuities specifically. With the contraction of financial advice, down to around the 16,000 advisor mark, not all of those advisors in the market deliver retirement advice. We know that there's a third of those advisors who just give insurance-only advice. We think our penetration in the retail advice sector is strong and gives us a good basis for growth. We haven't fully saturated that market, which gives us our growth platform. On the basis of customers and the income products that they choose, customers we are splitting between the mass customer, as Nick just spoke about, who is serviced by their superannuation fund. The large majority of those members will take the options that the fund puts to them and probably the age pension. That's not a market that we're going to address specifically or overtly. We will attack that through our institutional strategy by partnering with the funds using our investment capabilities. On that affluent and high- net- worth investor, we know that through studies we've done and through, supplemented by other market research, more than 90% of this customer base actually plan to construct their retirement income from a range of sources, not just specifically retirement income products, which underpins our thinking around broadening the Challenger capability set to bring multiple solutions across the alpha yield and solutions platform. Because we know that advisors, private banks, and institutions aren't necessarily always looking for a one-and-done product. They're looking for a broad platform from which to construct retirement income. Now that interest rates have normalized, what are you seeing sort of in the shorter term in terms of inbound inquiries, requests for a price quote in the annuities business relative to? Is it back to pre-COVID levels? Yeah. I'll make a couple of comments on that. As we spoke about in the 3Q, you know, having recently launched the MLA in March, April, with the sales team out on the road, with borders open, all those things happening, we were expecting that activity to prove beneficial. That was certainly what we spoke about, the green shoots in terms of quota levels. The other thing that has materially changed has been the conversation around rate. You know, the 3Q, I think we were talking about the three-year being 3.4%, and now it's 4% only, maybe it was a bit higher, but it's stepped up materially. From a proposition for advisors to discuss with their clients, it has changed significantly for Challenger in a short period of time. The sales team are very focused and busy out talking about, you know, the movement in rate plus also the product development with the MLA. As I said, green shoots in terms of quoting levels that'll need to translate into more sales activity. Can I ask one more just about the funds business? I think you pegged the capacity there at AUD 133 billion, so to talk about just over AUD 30 billion of headroom. Can you give us a bit more detail about how that was determined and which strategies the- Yeah. Okay. That's AUD 133 billion of additional capacity. That is the headroom? That's the headroom. That goes across every six months, we do a test of every one of the managers and their view on capability actually came down a little bit as we derecognized the Whitehelm business in this last period. They would have had additional capacity within that as well. The message there is substantial available capacity across our existing managers. Presumably the majority of that's in global equities? I wouldn't say it's a majority, but they're definitely between our global equity capabilities, which now number three, I think on the platform. That'd be a lot within Victor's credit markets. There's significant capacity. So, it is reasonably broad-based. I don't think we ever break it down by manager. You know, clearly where one of the messages, we've been very clear about on the boutique model is that capacity is an important lever to drive returns. A number of our managers are sitting at their natural level of capacity, and there, you know, they're not open, for example, for institutional business other than retail. Thank you. Thank you very much. Matt Dunger from Bank of America. Just wondering if we could start off on SimCorp, the joint venture. Can you talk to the economics and potential setup costs commencing in 2023, whether or not they're expected to be material? Stu, do you wanna take that one? Of course, Matt. You know, we're really pleased to announce the JV today, and it's a strategic piece that's really important. It's not a material tech build here that we're talking about. You know, SimCorp already have 70 clients globally that use a sort of a cloud-based solution. They're a business we know really well. There's a clear pathway in terms of moving our business from an on-premise to a cloud-based system. You know, in terms of costs, it all depends on how quickly we build third-party revenue and third-party clients. It sort of brings revenue, and there's transition that can happen in parallel. It's probably a little bit too premature to be talking about that today, but not material would be our expectation in 2023, if that's your specific question. Great. Thank you very much. Just a follow-up, if I could. On the Retirement Income Covenant, wondering if you could talk about some of the conversations you're having with clients and how that is driving the product development that you've been talking to. Terrific. Thank you, Matt. If you go back to our story over this last five years, and on the Life Company side particularly, you know, it has been a story of building out our institutional coverage. We didn't have anywhere near the breadth of clients that we have today, that are using either the term annuity or the Index Plus solutions. We make a point of that because relationships matter, in this segment. The familiarity that these clients get with Challenger's balance sheet and guarantee is really important component. The best person to speak about some of the activity that's going on will be Catherine, who's been really involved with Lucy in a whole range of discussions, with the super funds. Thanks, Nick, and thanks, Matt. We're in active discussions with all the large super funds today about their Retirement Income Covenant obligations, which commence on the first of July this year. Importantly, that commitment in July is just to outline their strategy to members, not to implement their solutions. I think Challenger has been one of the first phone calls that the funds have made when thinking through that broader strategy, and we've been very open with the funds about sharing our capabilities and our IP with them as they build out that strategy for their members. I think it's important to note that it's not a one size fits all for these funds. They all bring a unique set of goals, unique member bases, differing appetites across their investment management teams. What's really pleasing is that Challenger is able to respond to that, with its broad set of capabilities and all the components. What we're seeing, and as I outlined today, the partnership will be based on a bespoke and tailored solution for each of those funds. As they meet their obligations on the first of July, they will then turn their minds to implementation, and I expect that we'll remain in close conversation with our partners. We might take some questions from online now. A lot of interest at the moment, particularly around ROE, SimCorp JV, and Apollo. I'll try to summarize these as much as I can, because there are a lot coming in individually. Starting off with ROE, we've talked about the higher rate environment, and the beneficial impact this will have. What does this mean for your ROE target? If the current levels of rates and spreads stay where they are, what's the level of ROE that we should be thinking about? Okay, thank you for that question. As we've said, look, the ROE is set as RBA cash plus, and Pete's made the comments today that from a balance sheet perspective, it'll take time for some of that to come through. We're writing our business at the front end, very much mindful of our ROE target. Again, as Pete said, the investment opportunities are attractive and our ability to price, you know, is attractive. We're not changing any of our assumptions, as it were, relating to the ROE target. Great. The next question is really around pricing and ROE. With the shift in strategy from institutional towards high -net- worth, is the pricing and ROE supposed to be similar for retail and institutional business? Will the ROE and pricing of these new products be similar to the institutional channel or higher? Will the pricing be similar or better for shareholders? It's like a decision tree, that one. Our institutional pricing, as we've noted, around the annuity business, we've been writing at levels consistent with our ROE target. For the high- net- worth and affluent channel, probably just to comment, those channels will likely be customers of a broader range of products, not just the balance sheet or the guaranteed products, which would, you know, be commensurately higher ROE, you know, albeit maybe less different style business, lower fee business, if you like. I don't think it's as easy to say that the high- net- worth channels or the affluent channel in terms of what's the pricing strategy, you know, for it. Pete and the team remain very disciplined around pricing, ensuring that, you know, what we're able to invest our assets, you know, and the price that we're able to offer into the market will meet those return targets. Pete, any other thoughts from your side? No, nothing from me. Just quickly looking at PCA. With the PCA falling from, to 1.61 x, will there be any tempering of growth, from the very high levels that we've seen, all else being equal? Okay, thanks for the question. That's quite a technical one, given it relates to the FX and the offshore U.S. dollar assets and the high capital call. Do you want to make a comment or give them more detail there, Pete? Only that, you know, we remain very comfortable with our level of capitalization within the Life C ompany. You know, we have got significant flexibility within the investment portfolio to, you know, I guess, manage the level of capital that we've got deployed against assets. We're seeing a lot of very good opportunities in fixed income, which is, you know, the asset class with the lowest capital intensity. You know, we maintain a lot of flexibility within the portfolio to support ongoing growth. Great. Turning to SimCorp now. There are a number of similarly well-established players in this space. Perpetual and Pinnacle were named as two players. Can you please detail what you are going to be doing differently versus these competitors, and what gives you the confidence you can build and scale? Okay, thanks, Mark, for the question. There's probably a slight definitional issue there because what we're talking about here with SimCorp and investment operations solution is very different to a Pinnacle and a multi-boutique affiliate or to Perpetual with a trustee business. The way you should think about this, for 17 years, we've been using the core SimCorp Dimension system, right from the point at which the investment manager enters a trade all the way through to it sitting in a data warehouse and being used for client reporting. There's a whole lot of steps on the way from valuation, corporate actions, et cetera. As Stu made the comment, well, why we are unique is that our business, and you look at our, the spread of our managers and the instruments that they use, we use an extraordinary breadth of instruments across our platform. That's important. That is a real complexity, whereby you should view this as a dividend to the complexity that we are able to manage. SimCorp, as the leader in technology, has developed a cloud-based version of the on premise system that we use. The SimCorp partnership has, and I'm taking words out of Stu's mouth here, real complementarity for both sides. We have the people, the tools, the experience to use the software. They have the software and the development teams to keep on developing it. There's nuance behind, you know, clearly all of that in terms of we will get a significant uplift in our capability, which then makes it a very viable proposition for third parties. We already do this for our multi-affiliate boutique managers today. We provide arm's length outsourced administration service. It is definitely not comparable to the two examples that were given there. Stu, any additional comments? No. I completely agree. Very familiar with the market, the makeup, what other people are doing and what capability is available in the market. Yeah, what this offering is is very different to both of those examples quoted. Just staying along with the SimCorp theme, what market share are you expecting, and expected levels of profitability? Well, I'll make a few comments. In terms of level profitability, we've signed the MoU to do the JV. The team are going to stand this capability up. We'll come back to market with some updates at the full year results as to progress. You know, clearly, there's already a client, and that is Challenger as the anchor client for this business. Scale will come from adding new clients. Stu's made the comments about our confidence that what we have today is a service that will be a very strong interest, you know, to others in the domestic market as we found out. In terms of profitability, it was profitability was the question, what was- Yep. Oh, market share. Stu, you can- Yep. Say a few words there. You know, as Nick Hamilton mentioned, if you pick the right partners, it'll scale really quickly given the consolidation and the mergers that are happening in the sector. I don't think it would be appropriate to talk about the basis points that we make today. That's competitive information that we'll be using as part of winning new business. You'll be able to track it in due course as we stand the business up and keep the market fully informed as we grow. Just looking at Apollo. In terms of the Apollo joint venture, what are some of the terms that have been agreed between the parties? Have Apollo requested a board seat? I'll take the second part of that, and maybe Chris wants to make a few comments to the extent we can. Yeah, clearly, any question around a board seat would need to be as a consideration for the majority of the board, so it's, you know, clearly not appropriate for me to make comment in relation to that today. Chris, do you want to talk about the- Yeah. Look, all I'd say is that, you know, this is something we've been building for the long term, right? We wanna get it right. We're working through thinking about the platforms, thinking about the structuring aspects of it, you know, regulatory people and the like. You know, we'll update you when we've got something tangible to report back on. Great. Just turning to costs very quickly. One of Challenger's aims is to gain scale benefits. In recent years, the cost to income ratio has worsened despite the growth or the increase in scale. Can you please provide some more color or a bit more information on how you will manage costs? That's the question. Okay. Over the last number of years, the revenue line of the business has come backwards from, you know, changes in asset allocation and the growth assumptions. That doesn't change the cost base of running a business. We are very diligent on costs, and we've called out a number of initiatives today. All of them have been considered in the context of our overall expense base. I think Rachel could make a comment on that. Oh, thank you, Nick. Yes, they have. In terms of our whole cost structure, we've been really disciplined on costs. You will recall that, with the Bank, the additional people that, Mark called out, 24 people, so we've gone from 18 to 42. So that did add considerable costs and uplift. That's just making its way through. Traditionally, our costs are more, higher in the second half as we have more activity, et cetera. Our costs are in line with our expectations, and we're pleased with the discipline that the whole organization takes to costs. Excellent. Looking at the Bank term deposits in particular, term deposits offer a government guarantee. They're a more familiar product to a number of consumers than a term annuity. Are we likely to see a preference or shift towards more term deposits away from term annuities? Thanks, Mark. That comes back to the core strategy for why we acquired the Bank, and we recognize that the end market for term deposits is very significant. It's a ubiquitous style of product in the Australian market and psyche. It is a business that has very similar dynamics to that which we run in the Life Company. We feel very confident of our ability, you know, to successfully grow a Bank in the version that, as Mark has noted. With respect to the question of term deposit versus term annuity, that's a matter of customer preference. You know, there's so many different end customer points at which people make an acquisition of one or the other. Sometimes it will be one or the other. Sometimes there'll only be a choice of one or a choice of the other. For us, it's about broadening our customer reach, and leveraging something that, you know, we, I think we're very good at. The Funds Management business, just the rationale behind partnerships versus owning ownership stakes in the boutiques. Thanks, Mark. Well, I'll take that one. We've always had a buy, build, rent as the motto. You know, to the extent that you can build a new boutique, that's a fantastic outcome. To the extent that it doesn't make sense and partnerships provide a more immediate pathway for us, and we've done a number of partnerships in the last couple of years. Impax, 25 years global leader in impact investing. Ares, you know, global leader in asset origination or private lending opportunities. They're things where when we did those partnerships, we didn't have the capability. And the path dependency to build it doesn't make sense. You want to support what our customers need. We identify the need, and then we've, you know, found really attractive partnerships. Those partnerships are really important. Then, at times, and our newest one today, which we announced, is Cultivate. You know, I know in the funds team, they have a lot going on, looking at different opportunities, but it's probably the 5% that come through the pipe to serious consideration and then, you know, falls away even from there. The team have a great, really great pipeline of capability in Activate, or Cultivate, sorry. Cultivate. I don't know where I got Activate from. Cultivate is an example of something where we identify the customer need, and then we identify a team that's capable of meeting that. Lastly, in Life, with the market looking more favorable, the tailwinds looking more obvious, are we seeing any global insurers looking to come back into Australia? What are we seeing in terms of competition in the market? It's a great one for Catherine, 'cause I know she's got a ready-made answer for this other than to say competition's not a bad thing always. Oh, I think about the competition all the time, but what excites me is that I sit at Challenger, and I think that we have a unique set of capabilities and a deep domestic understanding of this market. Lucy and I have been overseas to meet our competitors face to face over the years. They don't know this market as well as we do. I think it looks very attractive from the outside, but when they get here, it does take a lot of relationship building and a lot of understanding for them to come up the curve. I welcome the competition. I think it legitimizes decumulation. I think it's exciting that the industry is turning their mind to decumulation, and I think we've got a front row seat to that at Challenger. Excellent. There's no further questions online. Does anyone in the room have any final questions they would like to ask Kieran in the front? Thanks. Kieren Chidgey. Nick, a lot of the strategy today is sort of very organic. What appetite does Challenger have for inorganic expansion? Yeah. The strategy today that we've laid out builds on our core capabilities, and if I think about one of the important legs to that strategy, it's the Bank, which we obviously acquired inside of 12 months ago. Integrating the Bank and getting ourselves to the position we are today, I think is a real testament to what good execution of a transaction looks like. We've been really consistent over the years in terms of inorganic. You know, we will clearly look at things that'll come to us, but the threshold and the bar is extremely high for us to transact. I really wanted people to walk away from today seeing just how exciting the organic opportunity is for us off our existing platform, lining up behind the customer with the sort of capability that we have. Thanks. Anyone else with questions? There being no further questions, I'll hand back to Nick, to conclude today's briefing. Thank you, Mark. Just to conclude by thanking everyone who's online, I believe there's over 100 people have joined us online, and everyone who's made it into the Wesley Centre today. On behalf of the whole team that have presented, it's been a lot of fun preparing this strategy over the last five to six months, and we've got real belief in what we have and what we can deliver over these coming years. With that, I thank you for your interest in Challenger, and we look forward to engaging with you all over this coming period. Thank you.