The $1.6 billion ASSET Super and the $4.6 billion Care Super are considering a merger.
At 4 p.m. today both funds publicly confirmed they are in discussions to form a $6.2 billion fund.
Michael O’Sullivan, chairman of Care Super, and David Michaelis, chairman of ASSET Super, say the benefits of scale are driving the discussions. The funds are undertaking due diligence to learn how a merged entity will provide more efficient services.
John Paul, CEO of Asset Super, says the ASSET board has considered merging with other funds in recent years.
“We have considered a merger might be a likely scenario for us,” he says. “It has been part of our strategic thinking for some time.”
ASSET has been the subject of recurrent rumours that it would merge as other funds consolidated into larger entities.
In the last fortnight Paul indicated to I&T News that ASSET was not part of an imminent merger. In 2010 he said the fund had been approached by five others to discuss a merger, according to the Financial Standard.
ASSET is a ‘multi-industry’ fund that draws members from diverse occupations. Care Super’s membership is concentrated in the professional, administrative, and service sectors.
ASSET draws on Mercer Investment Consulting for asset consulting services, while Care Super uses JANA Investment Advisers. They have different group insurers in MLC Ltd. and CommInsure respectively.
The funds both outsource custody to National Asset Servicing, a division of National Australia Bank.