Media Super merger one step closer
The industry's retirement fund Media Super is one major step closer to merging into Cbus, in a potential deal first revealed by Print21 two weeks ago.
The two funds are now officially signing a memorandum of understanding and commencing due diligence to proceed to an arrangement whereby they will merge their investment and back office operations next year but keep their own branding.
According to Media Super chairman Gerard Noonan, the joint arrangement would let Media Super members access the benefits of scale, he said, “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.”
Construction and building fund Cbus has $53bn of assets in its portfolio and is almost ten times bigger than Media Super which is a $6bn fund. Both are top performing funds, Media Super in the top five all 187 funds last year.
Media Super has been under pressure as the number of account holders has diminished in the last few years, as the media and printing sectors in particular have taken a battering, with a shrinking workforce resulting. In addition, the regulatory authority APRA has been pressurising smaller funds to merge with bigger ones to deliver economies to scale to their members. Media Super put a merger out to tender, with Cbus and industry giant Australian Super the final two in the running.
Media Super has around 78,000 members, Cbus 566,000. Media Super came into existence in 2008 when Print Super merged with Just Super. Gerard Noonan, then chairman of Just Super since 1991, became chairman of the merged entity.
Industry analysts say both Cbus and Media Super are strong performers. Last year Media Super served up a 17.4 per cent return, with the main Cbus product coming in just behind at 15.1 per cent, with a 10-year average for Media Super of 8.2 per cent slightly bettered by Cbus at 8.8 per cent. This year's figures though may well be in the negative.
The 10-person Media Super board is made up of six people from the print industry: Andrew Macaulay, CEO at PVCA; Susan Heaney from Gold Coast commercial printer Heaney's Performers in Print; and Peter Clark, founder of heatset web outfit AIW, which was sold to IVE. Also on the board are three people from AMWU. An additional four members represent other parts of the fund such as journalism, the arts, and entertainment.
Walter Kuhn, president of PVCA said, "We trust the members of the board to make the best decision for the fund members. Media Super is a member-led fund, its board is well placed to act in its best interests."
Noonan is thought to be the longest serviong chairman of a super fund. Cbus chair is former Victorian premier Steve Bracks. Cbus directors include representatives from the combative CMFEU.