The Queensland local government funds LGsuper and City Super yesterday confirmed their $5.5 billion marriage, but a separate $8 billion merger which has been discussed for more than a year is still not over the line.
LGsuper and City Super will merge from June 30, 2011, with JPMorgan becoming common custodian and Towers Watson the common asset consultant prior to that date, to “enable a more straightforward rationalisation of the fund’s investments”, according to current City Super CEO, Karen Gibson.
In an echo of Health Super’s recent deal with First State Super, the smaller Brisbane-based fund will carry only two directors on to the board of the merged entity, while all of the LGsuper directors will remain in place. Two additional independent directors will also be sought.
Current LGsuper CEO, David Todd, will run the merged fund while Gibson will be assigned a ‘senior management role”, in a merged secretariat that has promised to find room for all the employees of both funds.
The LGsuper model of internal administration will prevail in the new entity, with City Super’s administrator, Mercer, assisting in the transition.
Meanwhile the proposed merger of Maritime Super and Auscoal Super, first hinted at in the November 2009 edition of Investment Magazine, could be in doubt with talks due to resume in February next year.
Announcing the talks to Maritime Super members in July this year, Maritime Union of Australia president, Paddy Crumlin, said he expected a final determination around October as to whether the two funds could merge.
Last week, there were rumblings from some stakeholders that the merger was off the agenda permanently, however the funds denied this.
The CEO of Maritime Super, Peter Robertson, said: “At this stage the two funds remain in discussion with the next meeting set for February 2011.”
An Auscoal spokesperson said “no decision has been made to merge at this time”, and echoed that the resumption of discussions was set for February.
The two funds have a history of co-operation, for example co-investing on several unlisted asset deals.
