SMSF actuarial firm bought for $25m

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Investment management firm Challenger has bought Bendzulla Actuarial for $25 million.
Bendzulla is the leading provider of SMSF actuarial certificates in Australia with a majority market share, serviced through relationships with around 5,500 accounting firms.
Challenger intends to work with Bendzulla to expand its services to SMSF customers and their accountants.
The company currently has a particular emphasis on practical issues, such as providing calculators, information, workshops, support packs, and an online system for SMSF actuarial certificates.
Bendzulla employs 23 people and will remain headquartered in Hobart, operating as a wholly owned subsidiary.
CEO Tracy Williams will report to Challenger distribution, product and marketing CEO Paul Rogan.
The acquisition is earnings accretive, meets the required 18% pre-tax RoE hurdle, and will be funded from cash reserves, a statement from Challenger says. The deal will be completed in January.
“Bendzulla is a strategic investment for our company in terms of SMSF retiree research, product and service development and distribution,” Challenger CEO Brian Benari said.
“While all retirees value secure income streams, SMSF retirees tend to be more aware of longevity risk. They know that more money doesn’t necessarily insure them against the risk of outliving their savings.”
The acquisition comes as the Federal Government announced it will soon look at unnecessary barriers to developing longevity insurance products, as part of a broader review of the regulatory arrangements for retirement income streams.
“Longevity insurance products like deferred lifetime annuities are likely to hold appeal for SMSFs if designed with their particular needs in mind”, Benari said.
“We look forward to contributing to the Government’s post-retirement review.”
Challenger is Australia's largest annuities provider and seventh largest investment manager. The group's total assets and funds under management rose 31% for the 12 months to 30 September, 2013, to $46 billion.