LGIAsuper has revealed it is set to buy Suncorp’s superannuation business with the total consideration for the acquisition estimated at $45 million, which includes a fixed amount of $26.6 million, plus regulatory reserves.
LGIAsuper says its members will benefit from increased size and scale as well as reduced costs with the acquisition of Suncorp’s superannuation business (Suncorp Portfolio Services) in 2022.
The expected completion date for the transaction is H2 of the 2021/22 financial year, nearly 12 months after LGIAsuper’s planned merger with Energy Super on 1 July 2021.
The two transactions will see a combined fund size of around $28 billion and a membership of approximately 250,000 at completion.
According to LGIAsuper CEO Kate Farrar, an extensive due diligence process, regulatory consultation, and analysis of member benefits concluded that the Suncorp acquisition would ultimately provide significant advantages to current and future members of LGIAsuper, Energy Super and Suncorp’s superannuation business.
“This acquisition, combined with the Energy Super merger, will achieve an ideal, sustainable fund size, while maintaining our status as a boutique and personal superannuation provider,” says Farrar.
She explains: “With the superannuation industry consolidating rapidly, we want to see our Queensland-based funds thrive in an increasingly complex and competitive national market, and the best way to do that is together.”
Farrar adds: “LGIAsuper planned to keep the Suncorp fund operating as a standalone entity under the Suncorp brand initially, with its own trustee board, management and team. Suncorp’s superannuation members will not see any short-term changes to their fund or the team members who support them.”
In the medium term, LGIAsuper plans to mutualise and put the ownership of the fund in the hands of all members.
The investment from LGIAsuper’s general reserves was expected to be recouped by members within five years and, in addition, would deliver medium-term fee benefits.
LGIAsuper’s current investment portfolio includes Queensland assets, including the Gold Coast Light Rail, North Queensland Gas Pipeline, the Central Queensland Livestock Exchange, and the Sunshine Coast Airport.
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