Under the partnership, both funds would maintain their branding but their investment and administration operations would be consolidated.
Media Super overlooks a little under $6 billion in retirement savings for workers in the printing, media, entertainment and arts sectors; while Cbus is a $54 billion fund catered to the building and construction sectors.
The joint arrangement could result in a merged company managing the retirement savings of 800,000 people.
But it is conditional on a more detailed due diligence process, involving an independent assessment confirming that the merger would be in the best interests of both funds’ members.
Media Super chair Gerard Noonan said the agreement would let Media Super members access the benefits of scale.
“By increasing our size, we can provide access to a greater range of investment opportunities and provide a better deal through cost savings, potentially reducing the investment fees,” Mr Noonan said.
“Cbus has a strong offering with 30 per cent of its investment internalised and ownership of its market-leading developer, Cbus Property.
“We believe that the merger will also continue to build on our leading responsible investment approach and have a much stronger voice with the companies with which we engage.”
Media Super signalled two weeks ago that it was considering an offer made by Cbus.
The due diligence process has commenced following VicSuper and First State Super completing their consolidation to form a $120 billion fund.
Speaking on the Media Super merger, Cbus Super chair Steve Bracks said both funds have a strong connection with their members.
“For 35 years our fund has had a strong bond with our members,” Mr Bracks said.
“This affinity with our members has built a strong level of trust in the fund. Media Super has a very similar history and connection with their members.
“This is an exciting opportunity for both of our funds and I am very pleased to see this proposal progressing.”
Both funds stated they will not be making further comments until the due diligence process has come to a conclusion.
