Media Super courting corporate media fund

Media Super is in the initial stages of a merger with a corporate media fund, according to Media Super chief executive Ross Martin.

While he was reluctant to disclose the identity of the corporate fund, Martin said the merger made sense because many employees of large media companies were also members of Media Super.

The merger would most likely take place in 2012, considering the complexity and lengthy lead times involved, Martin said. He added that Media Super did not take mergers lightly, and it was not something that the fund would be rushing into.

"We are committed to growing our fund, but remaining within the media, printing, entertainment and arts industry. We're not out there just to take funds for the sake of taking funds. We want to remain a niche player in our market," Martin said.

In addition to increasing its membership base through a potential merger, Media Super is also looking to improve its client retention, at a time when members leaving to form self-managed superannuation funds (SMSFs) is becoming a growing problem for industry funds.

"We're employing an outside consultant to do member surveys on a number of issues. We're targeting members who have transferred to SMSFs - the reasons why, and what we can do to stop that or improve our member offering," Martin said.

He said his instinct was that SMSFs were rising in popularity because people had responded badly to negative superannuation returns during the global financial crisis, and were setting up SMSFs with the majority of the funds in term deposits.

This might seem attractive at the time, Martin said, but over the long-term, funds like Media Super provide a better return.

"We're about to issue an annual report, and despite what's happened over the last few years, our 20-year return is about 8.8 per cent," he said.