POWERED BY MOMENTUM MEDIA
AustralianSuper merger will lock in growth, says AGEST
The merger with AustralianSuper will provide AGEST Super with strong membership growth, good cash inflows and scale efficiencies, according to AGEST chief executive Cath Bowtell.
"It's not just about being big, it's about being a fund that has strong cash inflows and strong member growth," Bowtell said.
Both funds share a similar investment philosophy, and AustralianSuper has a "good suite of products" that is similar to AGEST's offering, she added.
The selection of AustralianSuper as a merger partner followed a tender process that AGEST commenced in September 2011.
The two funds will now negotiate the implementation of the merger and conduct due diligence on each other, Bowtell said.
"Our board will have to be convinced that the costs to our members are outweighed by the benefits to our members," she said.
One big potential cost in a merger is the potential loss of deferred tax assets, Bowtell said. AGEST has sent a submission to the Government requesting capital gains tax rollover relief to resolve the issue.
But while there are execution costs involved in undergoing a merger, failing to merge could also cost AGEST money, Bowtell said. She cited regulatory costs and the establishment of operational risk reserves in particular.
AGEST has 130,000 members and funds under management (FUM) of $4.3 billion.
The merger will further cement AustralianSuper's position as the largest industry fund in the country, bringing its FUM to $46 billion.
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
