Two industry superannuation funds will pool their assets to create a $61 billion trust, in a move that is set to be a better alternative to a merger.
Touted as an industry first, Maritime Super and Hostplus today announced an asset-pooling partnership that will take effect 30 April 2021.
Maritime Super's $6 billion of assets under management will combine with the $55 billion Hostplus via the Hostplus Pooled Superannuation Trust (PST), subject to final board approval.
Maritime Super chief executive Peter Robertson told Financial Standard that the branding, administration services, boards of the two funds, and insurance will remain as is.
Maritime is aligned to Hostplus on many levels, they have the same asset consultant in JANA, and active management investment philosophy, he said, adding that the partnership will provide the smaller fund the benefits of scale, liquidity and access to more investments.
"It is simply changing one investment structure into another and at the end of the day Maritime is still standalone, [the only difference is] we are investing units in Hostplus' PST," Robertson added.
This scheme will give Maritime access to Hostplus' investment options like unlisted assets in infrastructure, property, private equity and venture capital.
Insurance coverage will remain customised for Maritime's 27,000 members.
Maritime members can expect their fees to come down, Robertson flagged, describing the partnership as a "win-win" for all members.
Maritime has kept its doors open to potential mergers in the past. In 2011, it considered a merger with TWU Super, but fell through. Hostplus finalised its latest merger with Club Super in 2019.
"We are a mature fund having been around for 53 years," Robertson said.
"To be able to leverage the liquidity of Hostplus is going to make a big difference to members in the long term and our aim is to improve outcomes for members and we think this is the best way to do it and [to do so] now."
Hostplus chief executive David Elia said the fund's PST structure provides a clear and distinctively viable alternative to mergers and acquisitions, especially for smaller funds that are otherwise well-performing and delivering good and valued member outcomes.
"Hostplus' PST provides other APRA-regulated funds, and especially smaller funds, a viable and effective alternative to a merger by extending their outsourcing operating model to now include the management of their investments alongside one of Australia's largest and long-term well-performing profit to member funds, while maintaining full control of their fund's strategy and member and employer relationships," Elia said.
In May 2019, Equipsuper and Catholic Super announced a joint venture that combined their investments, administration and offices, but retained their separate branding.