NGS Super and QIEC Super are discussing integrating into a master trust, as they believe it will offer greater economies of scale and benefits to their members.
This is the first time two industry funds have agreed to investigate this form of integration. Currently all industry super funds follow a wrap model, while retail funds commonly use a master trust structure.
Dick Shearman, chair of NGS Super, said: “The master trust structure is well used by retail funds to gain benefits of size while still enabling marketing of individual funds within the trust. We think the master trust structure can make good sense in the industry funds space.”
Terry Burke, chair of QIEC Super, said no decision has been made ahead of due diligence.
“While investments and insurance are obvious areas for potential integration, other aspects such as brand, marketing and fund administrator can continue with current arrangements under the master trust model,” Burke said.
Shearman added that the boards of QIEC and NGS Super have executed a memorandum of understanding with the intention of investigating the master trust.
“Initial discussions have identified potential benefits and synergies and we now want to examine those more fully in a formal due diligence process,” Shearman said.
NGS Super manages approximately $7 billion and has 100,000 members nationally. QIEC manages approximately $1 billion and has 28,000 members, mainly based in Queensland. Both funds serve the non-government/independent schools sector, with QIEC having a larger presence in the early childhood education segment than NGS.