Equity Trustees Limited is set to take over Australian Unity Investments’ corporate superannuation business.
The two companies are negotiating the transfer of AUI’s Freedom of Choice Superannuation Masterfund and the Freedom of Choice Portfolio Service (IDPS).
The deal is subject to further due diligence and trustee and regulatory approval and is expected to be completed in the third quarter of 2007.
AUI has decided to pull out of the corporate super arena because it wants to concentrate on boosting its property, equities and joint ventures businesses instead of investing in an area that has larger competitors and had slower growth.
“Further capital expenditure, particularly in technology, is required to satisfy the increasingly complex needs of the corporate super fund members and investors, AUI head David Bryant said.
“[Equity Trustees] has a higher degree of scale that they can bring to this type of scheme.”
Bryant confirmed that there were several bidders for the business, which includes mix of corporations and individual investors, and that the Freedom of Choice brand will remain.
There are approximately 5,500 members across both the fund and IDPS.
The transfer would add $150 million in funds under management to Equity Trustees’ corporate superannuation business, which already manages in excess of $400 million.
Equity Trustees’ two other corporate super funds are the Templetons Masterplan and Wealthpack Superannuation Service. Wealthpack recently had a name change to Equity Trustees Superannuation.
The corporate super portfolio makes up 19 per cent of Equity Trustees’ business, which also includes funds management, fund service and a private client service.
Equity Trustees has a solid structure that will enable the corporate super side of its business to grow, Equity Trustees head of distribution and marketing Mark Godfrey said.
“For a while now we’ve had our eye on potential acquisitions. It’s a good specialist business for us to be taking on,” Godfrey said.
