Challenger has announced a $300 million equity raising to strengthen its capital position and take advantage of returns of up to 20 per cent.
The offering consists of a $270 million fully underwritten institutional placement and a share purchase plan of up to $30 million.
The institutional portion of the placement will be at $4.89 a share, an 8.1 per cent discount to its last traded price, and will increase Challenger's total shares on issue by nine per cent.
Goldman Sachs Australia and Macquarie Capital are the underwriters.
"Raising additional capital will support our business to remain strongly capitalised so we are well placed to withstand and respond to further market volatility," said Challenger managing director and chief executive officer Richard Howes.
"At the same time it will provide us with flexibility to take advantage of selective investment-grade opportunities with attractive returns."
Mr Howes said Challenger was seeing investment-grade opportunities to generate pre-tax returns in excess of 20 per cent on the capital backing its fixed-income assets.
Challenger said that it didn't intend to pay a final dividend in September, given the uncertain economic conditions.