By Nick Hedley
HESTA Super Fund, which manages investments on behalf of employees
in Australia’s health and community services industries, plans to absorb Mercy
Super to create a fund with nearly A$70 billion (US$49 billion) under
management.
Consolidation across the Australian retirement fund industry
continues to advance as managers aim to build scale. Among other deals, QSuper
and Sunsuper recently merged to create the Australian Retirement Trust.
HESTA and Mercy Super have already signed a letter of intent
to merge, they said in a joint statement. If the transaction goes ahead before
the end of the year, as planned, then Mercy Super’s 13,000 members will be transferred
to HESTA. The fund has A$1.7 billion under management and is targeted at
employees in the health, elderly care, education, and community welfare
sectors.
HESTA CEO Debby Blakey said the merger would “continue to
position HESTA as the fund of choice for those wanting their super to have
impact.”
Mercy Super CEO Wendy Tancred said the transaction would
ensure the firm’s client investment portfolios remained strong and sustainable.
After conducting an analysis of peers, the Mercy Super board
decided to enter into exclusive discussions with HESTA.
“In HESTA we have chosen a top-performing fund that shares
our same commitment to the health sector and those working in it,” Tancred
said.
“We’re confident our members will continue to enjoy even
better retirement outcomes through a winning combination of strong performance
and low fees in a like-minded fund where the cultural fit is strong.”