POWERED BY MOMENTUM MEDIA
(October-2003) The eight lessons of a fund merger
In July, the Bus and Coach Scheme and Transecure were successfully merged into Tasplan, boosting its assets to around $460 million and its membership to about 85,000.
Tasplan’s general manager Neil Cassidy says small to medium sized funds are finding it more difficult to operate in a highly regulated and competitive environment. “Increasing complexity of fund management, licensing and compliance, together with stringent fund governance requirements have pressured a number of smaller funds to review their operations and to look for partners or options for mergers,” he says.
He adds that Tasplan was considered a suitable partner by Bus and Coach and Transecure as it had an excellent track record and a management structure in place that would ease the workload of trustees.
The three funds had been in discussions for 12 months. Cassidy says due diligence and detailed analysis was conducted on each fund which confirmed that they were well managed, but the prospect of increasing pressure on member fees and more aggressive competition for members’ monies was a signal to the boards of each fund to explore appropriate options.
He notes that the purpose of the merger was to develop a partnership that would enable the three funds to grow and expand their range of services and products. The merger helped Tasplan achieve the critical mass and the economies of scale needed to expand its investment strategies, secure better deals with suppliers and have greater purchasing power.
The benefits to members vary somewhat between the two transferring funds but in general, members now have more investment choices, financial planning, banking products via Members Equity, and a web site with on-line access to their accounts.
Tasplan has also set up an office in Parramatta and appointed a client service manager (CSM) there. According to Cassidy, this role is viewed as critical to the future development of Tasplan. “The CSM becomes the face of the fund, the personal contact, the relationship manager on whom the employer and member relies to conduct business with Tasplan.”
“Although the transition of records and details was very smooth and caused little disruption to administration, the actual process has been complex,” says Cassidy.
All three funds used Australian Administration Services (AAS ) and Mercer, and this proved invaluable to the process as their familiarity and knowledge of each fund helped to minimise the complexities associated with a merger.
Tasplan has focused on standardising administration procedures, the preparation of new enrolment documents and update of communication brochures which have been rolled out over the past few months.
Cassidy believes the merger is without doubt, Tasplan’s most significant development since its inception in 1987 and has proven that mergers can happen provided there is commitment and full co-operation from all parties involved. He lists detailed planning, co-operation of all three funds and a determination to make it happen in the interests of members and employers, as the essential ingredients for its success.
AUTHOR
Zilla Efrat
Recommended for you
The super fund has significantly grown its membership following the inclusion of Zurich’s OneCare Super policyholders.
Super balances have continued to rise in August, with research showing Australian funds have maintained strong momentum, delivering steady gains for members.
Australian Retirement Trust and State Street Investment Management have entered a partnership to deliver global investment insights and practice strategies to Australian advisers.
CPA Australia is pressing the federal government to impose stricter rules on the naming and marketing of managed investment and superannuation products that claim to be “sustainable”, “ethical”, or “responsible”, warning that vague or untested claims are leaving investors exposed.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
76.97 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
76.46 3 y p.a(%)
3
UBS Solactive Global Pure Gold Miners UCITS ETF Dis USD
51.13 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
45.15 3 y p.a(%)
5
Select Baker steel Gold Institutional
43.78 3 y p.a(%)
