Victor Rodriguez

Global investment management firm, Fidante, part of Challenger Limited, has announced a new strategic partnership with London-based Fulcrum Asset Management (Fulcrum), acquiring a substantial minority stake and securing exclusive distribution rights across Australia, New Zealand, and Asia.

Fulcrum, founded in 2004, manages GBP6.2 billion^[1] (A$12.6 billion^[2]) and is primarily a liquid alternatives manager specialising in macro (discretionary and quantitative) strategies, while also offering illiquid alternatives in the UK pension market.

The partnership marks Fidante’s second affiliate addition in 2025, after it welcomed System Capital in February, and underscores Fidante’s ambition to build a leading alternatives capability.

Challenger Chief Executive, Funds Management, Victor Rodriguez, said the partnership strengthens Fidante’s growth strategy by expanding its alternatives offering at a time of rising client demand.

“We are excited to be partnering with Fulcrum, a firm with a long and successful track record in macro strategies. Their expertise is a compelling addition to Fidante’s affiliate network and creates new opportunities for investors seeking world-class alternatives.”

Fulcrum’s heritage is in macro strategies with research at the core of its approach. The firm offers three principal capabilities – discretionary strategies, alternative solutions, and quantitative strategies – each underpinned by innovation and a disciplined investment process.

Fulcrum Managing Partner, Joe Davidson, said the strategic partnership provides the firm with a strong platform for growth in Asia-Pacific.

“We are delighted to enter into a formal partnership with Fidante. There is strong alignment between the culture and aspirations of both firms, and we are excited to work with Fidante to broaden access to our strategies for Australian and Asian investors.

“Fulcrum will remain an independent partnership and, as a partner-owned firm, we’re committed to growing our business while delivering long-term results for clients,” Mr Davidson said.

Fidante has 19 leading investment managers as part of its multi-affiliate model, spanning fixed income, equities, and various alternative strategies.

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Notes:
[1] As at 30 September 2025.
[2] Based on an GBP/AUD exchange rate of 2.0332 as at 30 September 2025.

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Andrew Godfrey

Equity Trustees is proud to be partnering with Challenger, as Note Trustee for the first-of-its kind, listed, unsecured investment vehicle, Challenger IM LiFTS 1 Notes (Challenger IM LiFTS).

Challenger IM LiFTS will provide Australian investors with a fixed term investment with monthly interest payments paid from the proceeds of a diversified portfolio of credit exposures managed by Challenger Investment Management (Challenger IM). The underlying portfolio is expected to comprise more than 100 credit exposures across private and public markets.

Andrew Godfrey, Executive General Manager of Corporate and Superannuation Trustee Services at Equity Trustees, said: “We are pleased to partner with Challenger IM on the launch of this pioneering investment structure in the Australian market. As a highly regarded credit manager with deep expertise across credit markets, Challenger IM shares our commitment to delivering innovative, high-quality investment opportunities for Australian investors.”

Victor Rodriguez, Chief Executive, Funds Management at Challenger, said: “The launch is aligned with Challenger’s long-term growth plans and commitment to investment excellence. This is a strategic milestone for Challenger, and we’re thrilled to be working with Equity Trustees to launch this innovative, first-of-its-kind note structure to the Australian market. It builds on our 20 years of experience investing in public and private credit and reflects our commitment to growing our listed retail presence with institutional grade income-focused solutions.”

“With the growing demand for private credit, Challenger IM LiFTS aims to provide access to this asset class via an ASX-listed fixed term debt security.  We were pleased with the overwhelming interest we received during the offer period and closed at the maximum raise amount of $350 million, demonstrating strong market appetite for this product,” he said.

Andrew Godfrey concluded: “As Note Trustee, our role is to ensure the Challenger IM LiFTS operate to the highest standards of governance and compliance. We are proud to support Challenger in introducing this new listed structure, which expands investor access to diversified credit opportunities.”

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Victor Rodriguez

Challenger Investment Management (Challenger IM), part of Challenger Limited, has today announced plans to launch an innovative first-of-its kind listed unsecured investment structure, Challenger IM LiFTS 1 Notes (Challenger IM LiFTS) to be quoted on the ASX.

Challenger IM LiFTS will provide Australian investors with a fixed term investment paying monthly interest payments (deferrable in certain circumstances), which will be paid from proceeds from a managed and diversified portfolio of credit exposures.

The launch marks a significant step in Challenger’s strategy to broaden access to income-generating investments and expand its presence in the listed debt market. It also signals the start of a new issuance program, designed to meet growing demand for private credit exposure in a more accessible format.

Victor Rodriguez, Chief Executive, Funds Management, said the launch was aligned with Challenger’s long-term growth plans and commitment to investment excellence.

“This is a strategic milestone for Challenger, and we’re thrilled to launch this innovative, first-of-its-kind note structure to the Australian market. It builds on our 20 years of experience investing in public and private credit and reflects our commitment to growing our listed retail presence with institutional grade income-focused solutions,” Mr Rodriguez said. “

With the growing demand for private credit, Challenger IM LiFTS aims to provide access to this asset class via an ASX-listed fixed term debt security. We have secured cornerstone commitments of $100 million in under 24 hours from its opening demonstrating strong market appetite for this product,” he said.

Challenger IM LiFTS offers a fixed term of seven years (with a target repayment date on the sixth anniversary of issue), monthly interest payments (deferrable in certain circumstances) and daily liquidity via the ASX. The interest rate payable is 1M BBSW + 2.75% per annum and includes a first loss buffer, designed to provide additional credit enhancement to noteholders. The underlying portfolio is expected to comprise of more than 100 credit exposures across private and public markets, with limits on individual positions and industry concentrations to support diversification.

Challenger IM is one of Australia’s most experienced credit managers with more than $16 billion1 in fixed income assets under management, and a strong track record of delivering risk-adjusted returns through multiple market cycles.

IM LiFTS is being brought to market by a syndicate including lead arrangers National Australia Bank, CommSec, E&P Financial and Morgans, with joint lead managers Ord Minnett, Wilsons, Canaccord and Taylor Collison.

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Notes:
[1] As at 31 March 2025 Challenger

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System Capital is a global long-short manager founded in 2022 by well-regarded Portfolio Manager, Lev Margolin. The strategy is well suited to family offices, High-Net-Worth investors, and retail clients.

Typical of Fidante’s affiliate model, Fidante has taken a substantial minority equity stake in System Capital and entered into an exclusive distribution agreement.

The System Capital Long/Short Fund is a global concentrated strategy focused on identifying pricing inefficiencies between the valuation of a business and its business quality. The Fund employs detailed, bottom-up fundamental research to identify companies with strong and growing cashflows over the medium term with a strengthening competitive position.

The Fund’s absolute return focus also means the Fund can benefit from situations where a structural position of a business is weakening and that is not yet reflected in valuation, as well as adjust the Fund’s market exposure (net long) to protect the portfolio from market dislocations. The aim is to achieve consistent absolute returns and greater downside protection for investors.

The partnership will allow System Capital to scale and grow FUM, while strengthening Fidante’s multi-affiliate proposition and suite of investment choices.

Fidante now boasts 20 leading investment managers as part of its multi-affiliate model, spanning fixed income, equities, and various alternative strategies including System Capital.

Commenting on the partnership, Victor Rodriguez, Chief Executive, Funds Management at Challenger said specialist, active managers come to the fore in times of increasing market volatility and uncertainty.

“We are excited to be partnering with System Capital,” Mr Rodriguez said. “We believe Lev Margolin’s expertise in long-short investing, combined with the extensive experience of the System Capital team, presents a unique opportunity for Australian investors looking to take advantage of under and overvalued global stocks.”

“At Fidante, we strongly believe in the value of active management and the distinct advantages specialist, independent managers offer in an increasingly competitive market. We are committed to ensuring investors have access to best-in-class, active fund managers, across a wide and diverse range of products and capabilities,” Mr Rodriguez said.

Why global long-short

Commenting on its investment strategy, Mr Margolin said System Capital is looking to deliver consistent absolute returns in a world experiencing record change and transition.

“Our Fund is not constructed with a specific investment thematic or qualitative overlay. Rather, we look to take advantage of structural winners and losers within specific industries to deliver absolute returns,” Mr Margolin said.

Since inception in October 2022, the Fund has returned 24.3% p.a. (before fees) as at December 2024.

“We see our partnership with Fidante as a natural evolution of our business,” Mr Margolin said. “It brings a new and differentiated investment strategy to the Fidante stable and allows us to grow our investor base.”

“Our business remains majority-owned by our team, and we will continue to reinvest in the growth of the business.”

Fidante is a global investment management business with approximately A$100bn in FUM*. Fidante provides investors with access to best-in-class investment managers. They are one of Australia’s largest active investors, offering compelling strategies across equities, fixed income, and alternative assets, via partnerships with leading investment teams.

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* As at June 2024

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Victor Rodriguez

Global equities and Australian small caps present the greatest opportunity for local investors in the coming six months, but current high valuations and economic headwinds remain front of mind for advisers, according to the inaugural Fidante Adviser Markets Survey released yesterday.

Fidante surveyed over 200 financial advisers on the current opportunities and challenges for investment markets and where they were planning to allocate client funds in the coming six months.

Global equity markets were forecast to deliver the best returns over the coming six months. Close to half of the advisers surveyed (46%) remained bullish on the performance of global equities, with 39% predicting it would be the best performing asset class over the period. One in five advisers plan to increase allocation to global equities in the coming six months.

Victor Rodriguez, Chief Executive, Funds Management, Challenger, said the results reinforce the trend Fidante is seeing with recent strong inflows to this asset class and clear demand for active management to capitalise on the opportunities.

“Led by the US, global equities have driven significant outperformance for several years now, and our research shows that advisers expect this trend to continue as we enter 2025,” Mr Rodriguez said.

“Specifically, AI and healthcare are driving exciting growth potential in global equities, and we expect inflows to reflect this. As we head into 2025, advisers’ optimism highlights the lasting appeal of global equities as a powerful tool to generate returns, even amid economic challenges.”

Despite the bullish outlook, advisers have flagged concerns that global markets may be becoming too expensive. High valuations were the leading concern for 26% of respondents, closely followed by economic slowdown (23%) and geopolitical tensions (22%).

Locally, economic slowdown (44%) and high valuations (27%) were by far the two leading concerns facing Australian equities in the coming six months.

“Inflation is no longer a primary concern and attention is focused on valuations and the potential for an economic slowdown,” Mr Rodriguez said.

The great rotation to small caps

While large caps have driven market highs over the past year, led by the Magnificent Seven in the US, survey respondents are flagging small cap equities as a priority for the coming six months.

Over half of advisers surveyed (51%) are bullish on the outlook for Australian small caps, compared to only 32% bullish on Australian large cap stocks.

In fact, 35% of advisers expect to increase client allocations to Australian small caps, second only to fixed income (41%). Only 9% are planning on increasing allocation to Australian large caps, while 16% plan to decrease allocations.

Evan Reedman, General Manager, Fidante Affiliates, said as markets have been re-setting record highs in recent months, advisers are taking the opportunity to rebalance portfolios.

“Advisers are responding to high valuations in large cap stocks,” Mr Reedman said. “We’re observing a clear shift in focus towards Australian small cap equities, with advisers recognising untapped value in this space after lagged performance in recent years.

“Fidante’s latest Adviser Markets Survey shows that diversification and targeted allocation remains a key priority for advisers with infrastructure (30%), private credit (24%), and private equity (18%) capturing their attention,” he added.

“There is no doubt that advisers are looking for active management in market segments that provide a clear purpose in a portfolio. Whether that be to generate alpha, provide uncorrelated returns, or deliver a consistent income stream,” Mr Reedman said.

Read the full report.

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