AUSTRALIA - Cbus Super and CONNECT Super have announced intentions to merge, creating an A$15bn (US$13.8bn) fund covering 600,000 members in the building and constructions industry.
The two industry superannuation funds have, in principle, agreed to complete the merger by October 1, pending the result of due diligence activities by both funds' trustees. Cbus currently has around A$14bn in assets and 577,000 members, while CONNECT has A$700m in assets under management and 27,000 members.
The funds have only commenced the due diligence process, but initial discussions leading up to this announcement made Cbus believe the merger will be a "natural fit," said Cbus chief executive David Atkin.
Part of the due diligence process would be to rationalise investment management services. Currently, both superannuation funds share the same custodian, National Australia Bank.
Atkin also said that while the merger with CONNECT was the only one on Cbus's horizon, the fund was "open" to discussions with other superannuation funds in the industry.
"We're only talking with CONNECT at the moment, but we see ourselves as the national industry fund for construction and building allied workers," Atkin said. "It makes sense for us to be open to discussions with other funds who want to join us."
CONNECT chief executive Sean Leonard cited a recognition that the smaller fund would struggle to provide cost-effective services to its members as one of the reasons trustees agreed in principle to merge with Cbus.
This is the first merger for Cbus since 1995, when the then C+Bus Super merged with the Combined Trade Unions superannuation fund.
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