Spirit Super and CareSuper, two midsized super funds with between A$20 billion ($12.8 billion) and $25 billion in retirement assets apiece, are exploring a possible merger.
The combination of CareSuper, a Melbourne-based fund with roughly A$20 billion in retirement assets, and Spirit Super, a Hobart-based fund with A$25 billion, would create a fund with more than A$45 billion in retirement assets and over 500,000 participants, according to a joint announcement.
A spokesman for the funds said neither has at this point announced a strategic rationale for a merger. However Australian regulators have long made it known that they consider scale a key factor in super funds being able to provide participants with adequate investment results at reasonable fees.
It would be a second combination in a short space of time for Spirit Super, which was formed by the 2021 merger of Tasplan and MTAA Super.
CareSuper Chairwoman Linda Scott and Spirit Super Chairwoman Naomi Edwards, in the joint statement, said both funds have identified a "common vision to potentially create a midsized fund that provides a distinct point of difference in the market."
"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" — a process that will take several months, Ms. Scott and Ms. Edwards said.
