Australia’s pension funds Equip Super and TelstraSuper have agreed to merge and form a new fund with more than A$60 billion (nearly $39 billion) in AUM.
Under the agreement, the combined fund will retain the Equip Super brand, while TelstraSuper—the A$16.8 billion pension fund for Australia’s telecom major Telstra—will retire. The merger is expected to happen in 2025.
Equip Super manages around $35 billion in funds and has 140,000 members in sectors including mining, automotive, energy, teaching and healthcare.
In Australia, total superannuation assets were A$3.9 trillion at the end of June, according to the Association of Superannuation Funds of Australia.
The large pool of domestic capital provides a major tailwind for the private markets, especially with the super funds looking to increase exposure to the asset class.
In October, the two largest superannuation funds, AustralianSuper and the Australian Retirement Trust, announced strategies to increase private holdings by 7% and 1.5%, respectively, over the next few years.
However, as superannuation funds become more sophisticated and comfortable with private investments, they also gain more negotiation power over GPs on fees and co-investment rights.
The right to invest alongside GPs’ funds could enable super funds to participate in the same strategy while bypassing paying fees, according to the 2024 Australia and New Zealand Private Capital Breakdown.
Featured image by William West/Getty Images
Learn more about our editorial standards.
