Fidante and Channel Capital Merger

Research evidence excerpt

Fidante and Channel Capital Merger

apabilities: The platform will offer a diversified suite of public and Source: FactSet

private market strategies, including equities, fixed income, and alternatives. Importantly, this Figure 2 - CGF Historical P/E Ratio

aligns with industry direction and iv) Service Model: Beyond investment management, the CGF P/E CGF Average +1 Stdev -1 Stdev

group provides fund incubation, administration, and Responsible Entity (RE) services. 16.0x

15.0x

From Challenger's perspective, the transaction unlocks cash that may be used to support 14.0x13.0x

capital management, and also redirects management bandwidth toward the Life division and 12.0x

its retirement income strategy. 11.0x10.0x

9.0x

Merger Multiples and Accounting: Mgmt noted that the transaction is broadly consistent 8.0xFeb-22 Aug-22 Feb-23 Aug-23 Feb-24 Aug-24 Feb-25 Aug-25 Feb-26

with a high-teens earnings multiple for Fidante. This includes the 45% stake and the $172m .Source: Jefferies, FactSet

cash payment, with the contingent component (50%) discounted to today. While disclosure

is insufficient to accurately verify the transaction multiple, management mentions that the

combined entity should generate 35% EBIT margins. We estimate the total value of the Fidante

transaction to be around ~$400m. In addition, a ~$100m pre-tax gain will flow through

Investment Gains & Losses in FY27 and will be included in both core and operating earnings.

Earnings associated with CGF's 45% interest will be equity accounted and feature in Fee

Related Income.

About Channel Capital: Founded in 2013, CC is a privately held Australian-domiciled IM

services business that builds, supports, and distributes boutique Australian and global

investment managers.