The purchase fits Challenger’s strategy to grow both organically and through small bolt-on acquisitions, and provides a cost-effective opportunity for Challenger Wealth Management to build further scale and increase the diversity of its revenue sources, Challenger said in an ASX announcement.

Its new acquisition manages wholesale and retail funds across a range of asset classes. Its core strength is management of listed property securities and hybrid property funds, which adds an important fourth bow to Challenger’s well-regarded Australian equities, fixed interest and mortgage trust capabilities.

Key fund managers for HSBC Asset Management will continue to operate out of Melbourne, where Challenger manages its fixed interest funds.

Challenger anticipates an ongoing relationship with the HSBC group for the management of various international products, including the Asian equity fund, and the newly launched China fund and hedge fund products.