MTAA Super and Tasplan in talks to create A$22bn fund

Australian superannuation funds MTAA Super and Tasplan have entered discussions about a possible merger that would create a combined entity with more than A$22 billion ($15.4 billion; €13.6 billion) in assets under management.

MTAA Super, an industry fund serving the motor trades and allied industries, currently manages approximately A$13 billion, while Tasplan, a multi-industry fund based in Tasmania, manages around A$9.5 billion, according to a joint statement from the funds. Both are profit-for-member superfunds.

The merged fund would immediately place among Australia’s top 25 largest superfunds by AUM, according to the most recent statistics from the Australian Prudential Regulation Authority.

Tasplan has a single A$5 million investment in the agricultural sector, in a firm in Tasmania.

The two funds signed a binding memorandum of understanding to investigate the merger last week.

The new MOU follows the collapse of three-way merger talks between Statewide Super, WA Super and Tasplan that would have created a fund worth around A$24 billion.

MTAA Super previously held merger discussion with as many as three other parties, according to an Australian media report.

In a joint statement, fund chairs Naomi Edwards of Tasplan and John Brumby of MTAA Super said the increased scale of a merger would create efficiencies that could be passed onto fund members by way of increased returns and more competitive fees.

“While there is still much work to be done, we are excited at the prospect of building a fund of significant scale, enjoying widespread national membership and offering further improvements in benefits to our members over time.”

Equip Super and Catholic Super announced a merger in May that will create a A$26 million entity while maintaining the two funds’ brands operating as separate funds.

Merger talks between First State Super and VicSuper, which would create Australia’s second-largest superfund with A$117 billion of assets under management, are still ongoing after being announced in April this year.

First State Super infrastructure portfolio manager Mark Hector told sister publication Infrastructure Investor last year that the fund was likely to participate in mergers as the superannuation sector begins to consolidate.

“We know that there are scale benefits to underlying members from some of the larger funds,” he said. “First State Super was part of the [previous] largest merger in Australian super history with Victorian Health Super, so I would anticipate that there would be some more consolidation in the sector and more mergers in the coming years, and I would expect that First State Super, as one of the largest superfunds, would probably partake in that as well.”