Australian Retirement Trust to hoover up Qantas Super

The $300bn mega-fund has kicked off another merger just weeks after it finalised its last tie-up.

The nation’s second-largest super fund, the $300bn Australian Retirement Trust, has kicked off yet another merger, announcing it will hoover up minnow Qantas Super in a move which will add $9bn to the mega-fund’s assets under management.

Fresh off four mergers in the past year totalling $19bn, ART on Wednesday said it had entered into an agreement to merge with Qantas Super. The planned tie-up comes nine months after Qantas Super said it was exploring merger options in the market.

When completed, the deal will see the minnow’s more than 26,000 members and $9bn in funds under management transfer to Australian Retirement Trust.

ART, born from the merger of QSuper and Sunsuper in 2022, has been boosting its member numbers and funds under management through mergers in recent years; in the 2024 financial year alone it scooped up AVSuper, Woolworths and Endeavor Group, Commonwealth Bank Group Super, and Alcoa Super.

Announcing the planned tie-up on Wednesday, ART chairman Andrew Fraser said the $300bn mega-fund was an industry leader in the merger and transition space.

“The last financial year has been the biggest year of transitions for Australian Retirement Trust … not only does this cement our position as an industry leader in the merger and transition space, but it is evidence that trustees and corporate Australia are choosing us and we are incredibly proud of this,” he said.

Qantas Super chairman John Atkin said the decision had come after the fund explored a number of options for its future.

“Throughout the process of exploring merger options, ART has demonstrated its strong commitment to taking care of our members and their best financial interests,“ Mr Atkin said.

“We believe that ART will be the right partner to help our members feel confident in their financial future so they can look forward to retirement.”

The deal is subject to both parties completing final assessments of members’ best financial interests and signing a successor fund transfer deed.

While readying its plans to merge, Qantas Super was also one of the best performing funds in the market last year — its growth strategy returned 10.1 per cent for fiscal 2024, according to new figures from research house Chant West.

Mine Super, CFS First Choice and IOOF Balanced Investor Trust all topped the table for growth funds with returns of 10.7 per cent. This was followed by Brighter Super’s balanced option, at 10.6 per cent, and Qantas Super next at 10.1 per cent, ChantWest said on Wednesday.

Super funds broadly powered ahead in the previous financial year, with the median growth fund returning 9.1 per cent for the 12 months to June 30.

It is the second year in a row of 9 per cent-plus median returns and marks the 13th positive return in the past 15 years. The FY24 return is also well ahead of the typical long-term return objective of about 6 per cent per year.

Chant West senior investment research manager Mano Mohankumar said strong sharemarkets were the main driver of the better-than-expected FY24 result.

“International shares were the greatest contributor, surging 21.5 per cent over the year, led by the strong performance of the tech sector,“ Mr Mohankumar said.

“While not reaching the same heights, Australian shares also had a healthy year, returning 11.9 per cent.”

All major asset classes were in positive territory over the year with the exception of unlisted property, which was hurt mainly by downward revaluations in the office sector, he added.