Industry super funds CareSuper and Spirit Super have announced they have entered into a preliminary non-binding memorandum of understanding (MOU) to explore a possible merger.
If the two funds proceed with a merger, a combined fund with over 500,000 members and over $45 billion in funds under management (FUM) would be created.
“Both funds have identified a shared common vision to potentially create a mid-sized fund that provides a distinct point of difference in the market,” CareSuper chair Linda Scott and Spirit Super chair Naomi Edwards said in a joint statement on Wednesday.
“Both funds will now undertake extensive due diligence, before any decision is made, to ensure a merger is in the best financial interests for members of both funds.”
The super funds indicated that this process is expected to take several months, with both continuing to operate independently with no disruption to operations in the meantime.
“Both CareSuper and Spirit Super members can be assured they will be kept informed of any material decisions. There is no change to any aspect of any member’s funds, investments or insurances as a result of this preliminary non-binding MOU,” Ms Scott and Ms Edwards said.
CareSuper currently has over 220,000 members and $20 billion in FUM, while Spirit Super has over 324,000 members and $25 billion in FUM.
CareSuper was originally established in 1986 to look after super for office-based employees and ranks as one of the largest industry funds for Australians in professional, managerial, administrative and service occupations.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.