The Super Review Top Super Funds survey has identified a number of changes with respect to administration appointments, flowing from both corporate outsourcing tenders and the expiry of contracts.
However, Mike Turner, general manager, marketing and business development of administration provider, Pillar, says the majority of movement with respect to administration mandates has been occurring at the small-to-medium end of the spectrum rather than the top end.
He says he always regarded 2004 as likely to be a critical year in terms of administration tenders because of the number of contracts which came up for review.
Turner says this is already proving to be the case with Pillar having been short-listed on a number of administration tenders and having received preliminary documentation on a number of others.
Looking ahead, Turner believes there is likely to be continuing movement within the sector, with one of the particular unknowns being the consequences for Australian Administration Services flowing from Telstra’s recent acquisition of Kaz Group.
Telstra has made clear that the Kaz business will operate as “a stand-alone division within the Telstra business and Government segment”.
While the explanatory documentation surrounding Telstra’s acquisition of Kaz only touched in passing on the company’s involvement in the superannuation sector, the associated financial data makes clear that superannuation and fund administration are key revenue generators for Kaz.
Indeed, the Telstra documentation makes clear that the Kaz’s growing revenues from business process outsourcing represent a major driver for the acquisition.
Kaz Business Services and Kaz Software Solutions come under the broad heading of Business Process Outsourcing and account for 29 per cent of the company’s gross revenues, and 43 per cent in terms of earnings before interest and tax.
In documentation outlining the acquisition, it says “The complementary nature of skills and capabilities will enable the new business to offer complete solutions, expand into new markets and have less reliance on partners”.
