The $16 billion industry fund will gobble up a smaller corporate fund as merger activity begins to heat up.
Toyota Super will merge with Equipsuper in a deal that was made “in the best interests of members” and which would provide “greater investment and administration scale”.
“Toyota Super has a strong history of actively supporting their members and delivering consistent returns over the long-term,” said Scott Cameron, joint chief executive of Equipsuper and Catholic Super.
“We’re drawing on our track record of managing complex defined benefits and member transitions. Our focus is on ensuring members experience the benefit of consolidation, while maintaining the exceptional service and returns.”
Toyota Super managed $860 million on behalf of its 5,000 members. Equipsuper merged with Catholic Super in 2019, creating a joint entity that managed $26 billion while maintaining its separate brands, and Toyota Super will become a sub-fund of Equip.
“We’re open for business. Our aim is to grow to $50 billion in funds and roughly double our membership to 300,000 in the next five years,” Mr Cameron said.
“The funds under Togethr Trustees pride ourselves on our strong connection with members, and that focus drives our commitment to create products and services to help our members save more and retire better.”
Increasing fee pressure is expected to drive a flurry of merger activity, particularly between smaller funds, with the Productivity Commission finding that mergers among funds with less than $1 billion in AUM would be particularly helpful for the industry.
“Toyota Super has served members’ interests very well. However, the requirements for running a stand-alone corporate superannuation fund are becoming increasingly difficult, largely due to complex and changing superannuation regulations,” said Toyota Super chair Rob Purcell.
“We are confident this move can provide even better member outcomes. Equipsuper is a great partner, offering members excellent benefits, economies of scale, value for money, investment expertise and high-quality member services.”