AvSuper and Australian Retirement Trust (ART) have agreed to investigate a merger of the two funds. An AvSuper spokesperson confirmed that the two funds have inked a Memorandum of Understanding (MoU) that will kick off a due diligence period.
The news comes shortly after the MoU between AvSuper and Commonwealth Superannuation Corporation (CSC) was cancelled, with the proposed merger unable to proceed under the current legislative timetable as required changes are unlikely to be delivered in 2023.
“The reasons AvSuper first began exploring merger opportunities remain, and we believe a merger is in our members’ best interests. Partnering with ART will deliver added value, in terms of low fees, greater product choice and strong returns for our members,” said AvSuper chief executive, Michael Sykes.
AvSuper confirmed that ART was shortlisted in its initial expression of interest process 15 months ago, and has remained an interested and suitable partner for a potential merger. The funds will immediately commence due diligence activities with a view to completing the merger in the next 12 months.
ART has strong integration capability, having been formed in 2022 following the merger of Sunsuper and QSuper, and is one of the largest super funds in Australia with over 2.2 million members and more than $240 billion in funds under management.
Importantly, ART has a strong history of serving the public sector, along with extensive Defined Benefit experience and capability. AvSuper and ART both partner with AIA Australia as their insurer.
“We have a member-first culture and still see the opportunity to deliver a merger as critical to members’ long-term retirement needs,” added Mr Sykes.
“The MoU will allow a potential merger to be thoroughly assessed by all parties, with the best interests of members being the key deciding factor. We will keep our members, staff and partners informed of the next steps, providing regular updates via webinars and newsletters just as we have so far.”