The consolidation rhetoric of Jeremy Cooper has encouraged Sunsuper and other state-based, non-public sector funds to get serious about merger discussions.
Sunsuper, Westscheme, Tasplan and South Australia’s Statewide Super have been meeting since 1995, according to CEO of the $2.5 billion Westscheme, Howard Rosario, taking advantage of the fact they were not competing against each other for members, which enabled them to more frankly share their experiences.
The meetings, which tended to take place twice a year in the mornings before the CMSF and ASFA conferences, had entertained the possibilities of co-investments and collective procurement between the funds, if not actual mergers, but nothing concrete happened for many years.
However it’s understood that after Sunsuper bought the old Citistreet business and took control of its own member administration at the start of 2009, CEO Tony Lally mounted something of a campaign to convince his ‘state fund’ colleagues to merge at least some aspects of their operations, with the member administration platform top of the list.
Again, the familiar inertia around big fund mergers had begun to set in, only for the concept to have recently been reinvigorated by the Cooper Review.
While not speaking to the specifics of recent discussions between the state funds, Rosario did admit that Jeremy Cooper’s recent declaration that $2 billion funds were not viable had “exercised my mind and the minds of my board”.
However, Rosario said that commentary on the Cooper Review had focused on MySuper, overlooking the option of being a ‘choice’ fund, and “opening up to the dynamics of business”.
The CEO of Tasplan, Neil Cassidy, believed no merger of the four state-based funds was on the horizon, noting they all had different member administrators, and each had a culture bound up to some extent in their specific geographic location.
Tony Lally was unavailable for comment.