David Elia, CEO Hostplus

Hostplus has agreed to merge with its smaller competitor Club Super to create a $42.6 billion industry fund.

The two funds, which both serve the hospitality, tourism, recreation and sporting sectors, confirmed that they had signed a Successor Fund Transfer Deed ahead of a merger target date of November 1.

“The decision to merge has not been made lightly,” said David Elia, chief executive officer of Hostplus, which currently has $42 billion in assets. “We will continue to focus on ensuring our merged funds deliver high-quality products and services, investment performance and retirement outcomes for our 1.2 million members.”

The merger is the latest in a sector that is being pressured to consolidate by the regulator. Equip Super and Catholic Super agreed to merge their operations in May in a $26 billion deal and First State Super and VicSuper announced in July that they will combine to become Australia’s second largest profit-to-member super fund with $120 billion in assets. TasPlan and MTAA Super are also in talks after a tripartite merger deal with Statewide Super had collapsed. Statewide Super said it is still looking for a partner.

Club Super Chair Sharron Caddie said the merger with Hostplus showed that member best interests were at the forefront of the decision making. Both members and employers will shortly receive a detailed overview of the merger process, according to the statement.

Last week, First State Super CEO Deanne Stewart said she expects to see a handful of jumbo funds and clutch of niche players to emerge from the wave of consolidation hitting Australia’s $2.9 trillion superannuation industry. She said that the smaller funds will have to differentiate themselves in order to survive.

 

Sarah Jones worked for Bloomberg news in London for 12 years covering equity markets and global asset management. Prior to that she worked for Australian Associated Press in Sydney covering economics and monetary policy.
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