Sunsuper and Kinetic Super have confirmed that their slated merger is officially going ahead to create a $45 billion fund.
The two funds first announced that they had signed a joint head of agreement giving in principle support to the merger a little over three months ago on April 12, 2017.
On Monday July 24, 2017, the two funds again issued a joint statement announcing the tie-up had been given final approval by their respective boards.
The deal will see Kinetic Super, a $3 billion Melbourne-based industry fund with origins servicing the human resources sector, rolled into $42 billion Brisbane-based industry fund Sunsuper.
Following the completion of the merger, Sunsuper will control more than $45 billion in funds under management on behalf of 1.3 million members.
Kinetic Super chair Frank Gullone said he was “thrilled” with the result.
“The comprehensive due diligence process has clearly demonstrated that a merger between the funds will be in the best interests of all members, delivering a reduction in fees whilst also enhancing the products and services available,” Gullone said.
“With both funds consistently delivering industry leading investment returns, we look forward to working together to give our members the best retirement outcomes as possible.”
Sunsuper chair Ben Swan said the merger marked a new phase of growth for the combined entity.
“We believe we have an opportunity to set the standard for the industry in best practice for fund merger outcomes,” Swan said.
“The cultural synergies between both funds have certainly enabled us to successfully come together to complete the due diligence phase. As we start to shift gear and plan for transition over the next 12 months, both Funds will work together in partnership to deliver the best outcome to members and employers.”
Last year, Sunsuper chief executive Scott Hartley revealed ambitions to grow expand into “one of the big six” players in the market. Hartley explained at the time that Sunsuper would pursue mergers with smaller funds looking for a stronger partner as a key plank of that growth strategy.
The latest news with Kinetic Super follows a merger deal struck by Sunsuper in August 2016 to take over the Reserve Bank of Australia Officers’ Superannuation Fund, a $1.25 billion corporate super fund for the central bank’s employees.
As at June 30, 2016, the date of the latest available official statistics, Sunsuper was the 10th-largest super fund in the country, as measured by funds under management. The tie-up with Kinetic is set to bump it into ninth spot.