Queensland’s Brighter Super Group eyes new targets after merger

It’s been a big year for Queensland super mergers and one local fund says more are on the way as financial regulators determine bigger is better.

Brighter Super Group chief executive Kate Farrar. Picture: Mark Cranitch.

It’s been a huge year for Queensland’s superannuation sector. First there was the mega merger between QSuper and Sunsuper to create the $200b Australian Retirement Trust. This week LGIASuper, Energy Super and Suncorp Portfolio Services announced they will merge to create a $31bn member fund called Brighter Super.

Brighter Super Group chief executive Kate Farrar, the current boss of LGIA Super who led the merger with Energy Super last year and the April acquisition of Suncorp Portfolio Services, says the deal was a first for the Australian superannuation industry that is increasingly seeing larger funds gobbling up smaller competitors.

Farrar tells City Beat that the fund would be looking for at least one other merger in the future to beef up its financial size.

“APRA (the Australian Prudential Regulation Authority) says a fund that is $30bn in size is viable but ultimately they would like to see funds of between $50bn and 60bn,” she says.

Farrar adds it is the first time a retail fund, such as Suncorp Portfolio, has joined with a profit-for-member fund, reflecting the growing popularity of lower fee industry funds.

She says the new merged fund will ultimately deliver up to 70 per cent reductions in fees for about 130,000 Suncorp members.

Brighter Super Group chief executive Kate Farrar. Picture: Mark Cranitch.

GLOBAL HEADWINDS

Rising inflation, the outbreak of war in Europe and higher interest rates all spell bad news for everyone’s super accouts.

Leading superannuation research house SuperRatings estimates that the median balanced option fund fell by almost 1 per cent in May, as funds faced global market headwinds.

Brighter Super’s Farrar concedes the economy is on the verge of a cyclical, if not structural, transformation that will challenge market returns. “But people have to realise that it’s not market timing, but time in the market that’s the important thing,” she says.

She says Brighter Super’s chief investment officer Mark Rider, a former economist with the Reserve Bank of Australia, will be running the ruler over the fund’s investment strategy in the coming months to see if any adjustments need to be made. “One of the strengths of our fund has been our investment in infrastructure such as the Sunshine Coast Airport,” she says. That focus should stand the merged fund in good stead as things get tougher.

Farrar says one investment class the fund won’t touch is cryptocurrency. She says that’s not because of the volatility of crypto, but the fact “mining” the currency uses an incredible amount of electricity and is therefore environmentally unfriendly. 

MIXED RECEPTION

Property giant Mirvac’s multimillion-dollar support package for retailers hit by the permanent closure of the flood-damaged Toombul Shopping Centre has received a mixed reception.

Mirvac chief executive Susan Lloyd-Hurwitz says the support package will include a cash payout equivalent to three months’ rent. Toombul Barber owner Luisa Laurito believes the total payout would be about $4m but would hardly be enough to rebuild businesses.

“We will have to see but there are between 140 and 150 tenants so the payout would roughly be about $4m, so in the big scheme of things is that enough?” she says. “When you divide it up between the tenants it’s not that much.”

Laurito’s father started the business at Toombul Shopping Centre when it opened in 1967, and after the floods she and her business partners relocated in March to Ascot. “The CEO (Mirvac chief executive Susan Lloyd-Hurwitz) is now supposed to be meeting with all the tenants but after four months it’s a little late,” Laurito adds.

Mirvac said it had heard “the feedback loud and clear from our retail partners” and was committed to providing support.