CHALLENGER LIMITED — Capital/Financing Update 2013

MARKET RELEASE

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ASSETS AND FUNDS UNDER MANAGEMENT - 31 MARCH 2013

18 April 2013, Sydney – Challenger Limited (ASX:CGF) today announced that its total assets and funds under management at 31 March 2013 was $40.9 billion, an increase of 30% for the 12 months and up 7% for the quarter.

CEO Brian Benari said: “We are continuing to see strong growth in sales of our longer term annuity products. Lifetime sales, representing Liquid Lifetime and Care Annuity sales, comprised 18% of total retail annuity sales for the quarter, resulting in a growing proportion of sales from these relatively new products. As we approach the final and seasonally busiest sales quarter we are on track to deliver retail annuity net book growth of $500 million or 8% for the year to 30 June 2013.

“Improving the mix of new sales to favour Lifetime and longer-tenor product assists in increasing the future rate of net book growth, enables investment in longer dated assets which earn higher illiquidity premiums and is more efficient to distribute and administer.

“Total Funds Management FUM now stands at $37.8 billion and we are now Australia's ninth largest fund manager with growth driven by further strong inflows into our boutique funds management business. Fidante Partners FUM reached $26.4 billion, an increase of 49% over 12 months." said Mr Benari.

Challenger Life

Life’s AUM was $10.2 billion at 31 March 2013. Challenger Life’s retail annuity sales for the quarter were $354 million, which was broadly in line with sales in the prior corresponding period. Retail annuity sales comprised $290 million of fixed term annuities and $64 million of Liquid Lifetime and Care Annuities. Liquid Lifetime and Care Annuity sales comprised 18% of total retail sales, up from 4% in the March 2012 quarter. Institutional product sales were $31 million for the quarter.

Net retail book growth for the nine months to 31 March 2013 was $301 million representing 4.6% growth on the opening Life retail annuity book value of $6,553 million.

Further enquiry: Stuart Kingham, Head of Investor Relations, Challenger Limited, 02 9994 7125 Jana Flanagan, Investor Relations Analyst, Challenger Limited 02 9994 7815

Stuart Barton, General Manager Corporate Marketing and Communications, Challenger Limited, 02 9994 7008

Challenger Limited A.B.N 85 106 842 371 Disclaimer: The forward looking statements, estimates and projections contained in this release are not representations as to future performance and nothing in this release should be relied upon as guarantees or representations of future performance.

Funds Management

Funds Management’s FUM at 31 March 2013 was $37.8 billion, up 29% for the 12 months and up 7% for the quarter. Growth in FUM has been driven by strong net flows of $1.2 billion and positive investment markets.

Fidante Partners FUM reached $26.4 billion, an increase of 49% over 12 months and 10% over the quarter. Net flows for the quarter were $1,176 million, up from $614 million in the March 2012 quarter, comprising $809 million in Fixed Income products and $367 million in Equity products.

Aligned Investments FUM increased by 1% in the quarter to $11.4 billion, with net inflows of $56 million due principally to an increase in institutional property mandates offsetting outflows from the Howard Mortgage Fund.

ENDS

Stuart Kingham, Head of Investor Relations, Challenger Limited, 02 9994 7125 Jana Flanagan, Investor Relations Analyst, Challenger Limited 02 9994 7815 Stuart Barton, General Manager, Corporate Marketing and Communications, Challenger Limited, 02 9994 7008

Further enquiry:

Challenger Limited A.B.N 85 106 842 371 Disclaimer: The forward looking statements, estimates and projections contained in this release are not representations as to future performance and nothing in this release should be relied upon as guarantees or representations of future performance.

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Assets and Funds Under Management, net flows and sales

Life asset allocation

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Q3 13 Q2 13 Q1 13 Q4 12 Q3 12
2% 2% 2% 2% 3%
16%
4% 4% 15% 6% 14% 6% 16% 6% 16%
78% 79% 78% 76% 75%
Property Fixed income Infrastructure Equity and other
and cash assets assets
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1 Fidante Partners comprise 11 co-owned, separately branded active boutique investment managers from which Fidante receives distribution and administration fees, and shares in the profits from these businesses through its equity ownership.

2 Aligned Investments develops and manages products under Challenger’s brand for the Life business and third party institutional investors.

• 3 Fixed income (including asset backed securities).

4 Fixed Income is reported at Q3 2013 net of debt of $195m (Q2 2013 $236m).

5 Property is reported at Q3 2013 net of senior debt of $574m (Q2 2013 $611m). Property includes direct and indirect holdings and a small REIT holding.

6 Infrastructure is reported at Q3 2013 net of debt of $206m (Q2 2013 $206m).

7 Average total funds under management and Life investments calculated on a monthly basis.

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