Big investors want to build resilience into their portfolio and “get on with their job” of generating returns for members and clients even as policy shifts, short-termism and government interventions make that job much harder.
Large asset owners will need to develop a new risk management approach amid increasingly fraught political and investment conditions, according to a new Thinking Ahead Institute study.
Equip, TelstraSuper tout merger scale benefits in ‘new chapter’
TelstraSuper and Equip Super have signed a binding heads of agreement to create a new $60 billion profit-to-member fund with a quarter of a million members and “combined strengths” in member and employer servicing, retirement planning and tailored corporate arrangements. The merger is expected to execute via successor fund transfer in late 2025, with operational integration “substantially complete” by the end of 2026.
TelstraSuper began poking around for a merger partner back in May following “careful consideration” of its long-term strategy in an environment where size and scale are increasingly important. Equip was the winner in a comprehensive review of potential partners, with both funds talking up their complementary capabilities across retirement, advice and defined benefit investments, as well as their shared corporate super heritage.
The new fund’s board will comprise an equal number of legacy directors from both funds. Current Equip chair Michael Cameron will be chair of the merged fund, with Anne-Marie Loughlin – current TelstraSuper chair – sitting as deputy.
“It is a privilege to be named the inaugural chair, as Equip Super and TelstraSuper come together to form a new fund that will deliver scale benefits to our members, including an immediate fee reduction at the time of the merger,” Cameron said. “With a best of breed approach, we will maintain the personalised service both funds are known for, and bring to market leading products, services and capability.”
Equip and Telstra have already crunched the numbers on what the merger means for members and are promising a reduction in the asset-based administration fee to 0.15 per cent and a reduction in the admin fee cap to $750 per annum from the start date of the new fund.
“The agreement to merge follows a rigorous assessment by the trustee board of a variety of merger options that were available to TelstraSuper,” Loughlin said. “This coming together signifies a new chapter of growth, strength, and enhanced services for both funds’ members. With shared values, strong defined benefit experience, and a passion for financial advice, we look forward to building a united fund in the best interests of members.”
Chris Davies – the current CEO of TelstraSuper – will be head honcho on day one, but will be replaced by current Equip CEO Scott Cameron once the operational integration of the two funds is “complete to the satisfaction… of the board”. Also to go is the TelstraSuper brand, which will be “retired in due course”.
Another fund that ‘merged’ into Equip Super – $10 billion Catholic Super – kept its identity and operated as a division of Equip under its extended public offer model, which was designed to help funds achieve economies of scale in admin and investments “without loss of brand identity or control of relationships with members, employers and other stakeholders”.
