Cbus Super’s chief executive, Justin Arter, has said during a Parliamentary committee on superannuation fund size growth that the industry super fund is having acquisition and merger discussions with smaller funds “all the time”.
Arter was asked by Liberal backbencher, Tim Wilson, on whether his fund had engaged in discussions of an acquisition or merger with New South Wales-based EISS Super. However, Arter did not answer directly but said his fund was engaged in such discussions “all the time” with other smaller funds.
“We have discussions with a lot of smaller funds all the time but I don’t think it would be in anyone’s interest for us to disclose that,” he said.
Wilson replied: “So, that’s a yes”.
Labor’s Dr Daniel Mulino noted there were significant pros and cons of super funds getting bigger, including significant potential benefits like economy of scale and a reduction of costs across the administrative and back office side of the business.
However, he stressed there was also a number of smaller funds that could achieve this without the necessity of getting larger.
Cbus’ chief investment officer, Kristian Fok, said that getting bigger for the super fund meant being more mindful of how the capital was deployed but also it would allow access to different resources and capacity to add value in different ways.
“The actual cost of doing business from an asset management point of view is a very scalable thing,” he said.
“If we double the amount of money that we give to our global equities team they buy twice as many stocks the same price but in the percentage terms very efficient.
“So, we’ll need to shift our thinking to other things but we do think that as you grow [you need to be] mindful of that we can continue to drive excellent performance at a low cost.”
Earlier this month, Super Review reported that Cbus and Media Super had signed a successor fund transfer (SCT) deed to progress a merger.