PHOTO: Bluestone NZ
Challenger Expands into New Zealand with Acquisition of Bluestone Home Loans Mortgage Book
Australian-listed investment management company Challenger has made a significant move to expand its presence in New Zealand by acquiring Bluestone Home Loans’ New Zealand mortgage portfolio for $597 million in November.
New Subsidiary Facilitates Acquisition
To support the purchase, Challenger established a New Zealand subsidiary, Challenger NZ HoldCo1, under Challenger Life Company. This entity secured the necessary licences and registrations to service the acquired loans. Challenger NZ HoldCo1’s ownership is distributed among investors: 53% in Australia, 22% in America, 15% in Japan, and 5% each in the UK and other regions.
Expanding Whole Loan Investment Opportunities
Andy Armstrong, Head of Whole Loans at Challenger Investment Management (CIM), emphasized the strategic importance of this acquisition, noting the potential for whole loan investing to become a core part of Challenger’s allocation strategy.
“The whole loans asset class, including mortgages, personal loans, and asset finance, represents a large and attractive market both in Australia and globally, offering compelling returns,” Armstrong said.
CIM has been investing in residential mortgage whole loans in New Zealand since 2017, alongside its established presence in commercial real estate and acquisition finance markets. Armstrong highlighted that CIM plans to explore both forward flow opportunities—where loans immediately transition to the nonbank lender’s balance sheet for Challenger to service—and block portfolio acquisitions.
A Proven Track Record in Whole Loan Investments
Over the past decade, CIM has built expertise in purchasing whole loan portfolios directly from nonbank lenders. More recently, it has expanded its mortgage servicing platform to enhance its private loan investment capabilities.
Bluestone Exits New Zealand Market
Bluestone Home Loans exited New Zealand in August last year following a strategic review. The company concluded that the nonbank lending market in New Zealand was well-served and the market fit for its services was limited.
A Leading Nonbank Investor
CIM has established itself as one of the largest nonbank investors in Australian and New Zealand securitised credit markets. The company has maintained longstanding relationships with nonbank lenders in both countries, providing senior and mezzanine financing in public and private markets for over a decade.
Challenger’s acquisition of Bluestone’s mortgage book underscores its commitment to strengthening its foothold in New Zealand and capitalizing on the opportunities in the whole loans asset class.