Investment management firm Challenger has launched a $280 million capital raising to fund more growth in its annuities business.
The raising will include a $250 million underwritten share placement with institutions and a $30 million offer for existing retail shareholders.
It also intends to raise another $250 million in debt through convertible notes.
Chief executive Brian Benari said the time was right to fund expected future growth ahead of an annuities boom with retirees seeking steady cash flows.
"It's the right time to raise capital to fund expected future growth," he said.
"Over the next four years, our addressable market of post-retirement flows is expected to grow to over $100 billion."
Challenger lifted its full year normalised net profit - its preferred performance measure - by six per cent to $329 million after record flows into the annuities business.
Statutory net profit - including realised and unrealised movements in assets and liabilities - fell 18 per cent to $341 million.
Total annuity sales were $3.38 billion, including a 28 per cent rise in retail annuity sales to a record $2.8 billion.
This financial year the company is forecasting more growth in retail annuities of 12-14 per cent and cash earnings in that division of $535-$545 million.
The company increased its dividend to 13.5 cents from 10.5 cents.
Its shares were placed in a trading halt ahead of the capital raising, but are up 60 per cent for the year.
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