Challenger Financial Services Group will move its Australian equity income team into a new boutique, in a bid to retain key staff and attract experienced talent.
The listed group said it has formed Merlon Capital, which will now manage Challenger's Australian Share Income Fund and related mandates worth $670 million under a boutique structure.
The fund will be renamed the Merlon Australian Share Income Fund.
It will continue to be headed by portfolio manager Neil Margolis, who will also be Merlon Capital's principal. He will be joined by Challenger colleagues Ben Goodwin and Andrew Fraser.
Additionally, AMP Capital Investors head of Asia Pacific equities research Hamish Carlisle and ex-Portfolio Partners' portfolio manager Nerida Hall will be new additions to Merlon Capital.
Staff will have equity in the boutique.
Challenger will have a stake in Merlon Capital that is "not of a dissimilar" size to its holdings in other boutiques, a Challenger spokesperson said.
The company's other boutiques include Ardea Investment Management, Five Oceans Asset Management, Greencape Capital, Kapstream Capital, Kinetic Investment Partners and WaveStone Capital.
"The creation of this new equity income boutique reflects growing market endorsement of the institutionally-supported boutique business model," Challenger Funds Management's joint chief executive Rob Adams said.
The Merlon Australian Share Income Fund aims to generate tax-effective income and capital growth from listed shares over the medium to long term by identifying companies with attractive and growing dividends.
The funds are defensive in nature and use hedging to reduce overall portfolio risk.
Challenger yesterday also agreed to buy Credit Suisse Investments Australia, which includes five credit investment funds and two real estate securities funds.
