REST, one of the larger superannuation funds positioned to directly benefit from the government’s so called ‘stapling’ reforms, is not prioritising or pursuing an inorganic strategy, the fund’s new chief financial officer Kulwant Singh-Pangly has said.
The fund with $57 billion in assets is lodged firmly in the country’s 10 largest and will move forward this week with an unblemished performance test record despite being one of the MySuper providers at risk of falling short of the first hurdle based on December 2020 APRA data.
“Certainly for the time I have been [at REST] my assessment is we are not dedicating resources to merger discussions,” Singh-Pangly said during a discussion on the topic of mergers and consolidation as part of a roundtable hosted by Investment Magazine in partnership with MetLife Australia involving a dozen super funds executives. Full coverage of the mergers and consolidation roundtable discussion will be published next week.
“We are looking at a lot of other things that we think we can compete in and grow and grow strongly and they are the priority areas for the time being,” Singh-Pangly, who was most recently the group chief financial officer at QSuper for the last five years, said.
“Yes, we are in a very fortunate position in terms of stapling so that’s a very attractive position for the fund to be in,” Singh-Pangly noted during this discussion.
“The fund in many ways is already a very large fund, its close to 2 million Australians already and stapling will enhance that,” he said.
In the same breath though Singh-Pangly noted that mergers are not necessarily a priority.
“Of course fiduciaries have an obligation to act in the best interests of members and if something came knocking on the door we would of course assess it and look at it if it made sense. But its not a priority area at this stage,” he said.
Addressing REST’s underperformance relative to the government’s performance test benchmark in an interview with Investment Magazine in June, the fund’s CEO Vicky Doyle said her initial two-year journey to lead the fund’s transformation journey has turned into more of a five-year journey in light of disruptions due to Covid and shifting of the goalposts due to ongoing regulatory reform.
Doyle joined REST three years ago from AMP; the fund was hit hard by withdrawal resulting from the government’s emergency early release scheme in March last year. Doyle has since remodelled the fund’s investment approach and brought Andrew Lill as its inaugural chief investment officer.