Athene Holding Ltd has led a minority investment in Challenger Ltd, an Australian investment management firm.

The Bermudian-based financial services company said that, along with its strategic partner, Apollo Global Management, it has agreed to acquire a 15 per cent interest in Challenger from an existing shareholder, three per cent of which is subject to customary Australian Prudential Regulation Authority approval.

When combined with other Challenger shares acquired by Athene and Apollo, the acquisition of the 15 per cent equity interest will result in a total expected minority economic interest of 18 per cent for approximately $540 million, the company said.

Athene and Apollo said they see attractive long-term opportunities in partnering with and supporting Challenger's continued growth as minority shareholders.

Athene said it and Challenger share the same mission – to provide customers with financial security for retirement.

It added that Challenger is the pre-eminent platform in Australia for both annuities and investment management, with A$21 billion of life investment assets and A$104 billion of total assets under management as of March 31.

Athene and Apollo said they believe that Challenger is well-positioned to continue serving Australia's sizeable and growing retirement market.

The company said this investment follows Athene's pending agreement to merge with Apollo, combining the two companies to create a global solutions provider focused on delivering superior investment returns and retirement income.

Entering the Australian market through this investment in Challenger is a natural extension of that vision, and follows other new business initiatives Athene has undertaken in the United Kingdom and Japan over the last two years, the company said.

Jim Belardi, chief executive officer of Athene, said: "Investing in Challenger represents an exciting opportunity for us to support a well-established platform within the Australian market, a geography we have been studying given the current economic conditions and compelling demographic fundamentals.

"In many ways, Challenger is the perfect partner for us – the company is led by an experienced management team, has a strong market position, attractive growth prospects, and shares our deep commitment to retirees.

“Together, we believe we can help Challenger continue to build long-term value, similar to what we've been able to achieve in building Athene's business in the US and supporting the growth of our sister company Athora in Europe, where we are also minority shareholders."