The merger of Industry Fund Services and Members Equity, creating an enterprise with $26 billion in assets, marks the “end of the beginning for the industry fund movement”, according to the deal’s chief architect, Garry Weaven.

But it’s been a long, and at times difficult, beginning. At a lunch at NSW Parliament House last week, attended by about 300 industry participants, the outgoing executive chair of IFS provided an executive summary of his take on the history of industry super to date. For Weaven, the beginning of the beginning was 1983, with the start of the ACTU’s campaign for Award Super, a time when only 39 per cent of the working population had superannuation and total assets were less than $50 billion. The construction industry, which was one of Weaven’s areas of specialty as an industrial officer at the ACTU, was an early participant in the lead-up to Award Super, with the establishment of what became Cbus. The High Court validated super as an “;industrial matter”; in 1986 followed in 1987 with the Arbitration Commission agreeing that up to 3 per cent was to be paid by employers covered by awards. Industry funds were leaders in several areas, including private equity. The Development Australia Fund, for instance, was formed in 1990, the year that CMSF was launched, appropriately in Wollongong. With the introduction of the Superannuation Guarantee in 1991, phasing in an increase in contributions to 9 per cent, the growth of industry funds was assured. Australian Institute of Superannuation Trustees, now chaired by former Labor minister Susan Ryan, was founded in 1992 to provide educational support for fund trustees, many of whom had no experience in financial matters. But industry funds, with Weaven’s urging, wanted some control over their own infrastructure. IFS was formed in 1994, as was the Industry Superannuation Property Trust, followed by Super Member Home Loans in 1995, with the former National Mutual as the provider. In 1998 a group of industry funds bought a half share in the administration arm of Colonial Life – Jacques Martin (now SuperPartners) – for $1. They later paid $14 million for the other half. By 1999, IFS realised its mistake in not owning equity with National Mutual in the home loans business, so it took a 50 per cent share and formed Members Equity, later buying the lot. Potential conflicts from having fund-owned asset consulting were addressed in 2000 with the spin off of this business into Frontier Investment Consulting. Weaven said that highlights of the past couple of years included ME passing $10 billion in retail lending in 2003 and the formation of AUSfund, which he claimed was the only decent ERF in the market. Industry Funds Management passed $5 billion in assets in 2005 and bought all of Pacific Hydro to exceed $10 billion in assets by 2006. And it is Pacific Hydro which has become Weaven’s new passion. Weaven remains chair of IFM and a director of ME, which is now owned by 43 industry funds. Industry funds had $150 billion in assets at the end of the March quarter.

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