POWERED BY MOMENTUM MEDIA
More fund mergers to come says Rice Warner
Actuarial consultancy and research house Rice Warner has pointed to the likelihood of further superannuation fund mergers.
In an analysis published this month, the company has pointed to recent merger activity and the likelihood of further moves based on the number of not for profit funds with less than $2 billion in funds under management (FUM).
It pointed to the mergers of Kinetic into Sunsuper, Rio Tinto Staff Super into Equipsuper, the sale of the ANZ superannuation business to IOOF, the merging of Tasplan with the Tasmanian RBF Accumulation Scheme and the AON Master Trust merger with Equity Trustees.
“Yet, we still have a long way to go,” the Rice Warner analysis said and pointed to its research which had revealed that there were 79 not-for-profit funds with less than $2 billion.
“This is the same cash flow that AustralianSuper receives every 4 months,” it said. “Below that level, funds have higher operational costs and much thinner resources. These funds will not be viable in future so they need a growth strategy.”
The Rice Warner analysis said that, as a consequence, the industry could expect the same reduction in funds (60 per cent) in this decade.
“That will still give us 55 not for profit funds and a smaller number of retail funds,” it said. “In the latter case, the number of funds is partly a reflection of legacy products and we can expect that many will merge under the same corporate trustee.”
“This will provide a vibrant market with plenty of choice,” the analysis said.
AUTHOR
Mike Taylor
Recommended for you
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.
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
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
