Back
~
1
min read
· Posted on
February 21, 2024

The 'Super' wedding bells are ringing after CareSuper and Spirit Super tie the knot

After 2 short years as Spirit Super, it will merge with Caresuper to form a national, mid-sized super fund in late 2024.

What's the key learning?

  • Post-merger, the combined super fund of CareSuper and Spirit Super will have more than 500,000 members and $45 billion in customer funds under management.
  • Economies of scale refer to the cost advantages that a business can achieve due to its size and scale.
  • As a company scales up, and grows its revenue, it can spread its fixed costs over a larger number of units - and this reduces the average cost per unit.

👉 Background: You may not have heard of Spirit Super - that's because it was only formed in 2021 after a merger between Tasplan and the Motor Trades Association of Australia Superannuation Fund.  

👉 What happened: But now, after 2 short years as Spirit Super, it will merge with Caresuper to form a national, mid-sized super fund in late 2024. Post-merger, the combined super fund will have more than 500,000 members and $45 billion in customer funds under management.

👉 What else: And there have been a fair few superannuation mergers recently:

  • Brighter Super merged with the SPSL Master Trust
  • Mercer Super merged with Westpac's BT Financial Group
  • HESTIA merged with Mercy Super
  • Sunsuper merged with QSuper

And with so much regulatory scrutiny on super funds, it just makes sense to have the economies of scale.

What's the key learning?

💡Economies of scale refer to the cost advantages that a business can achieve due to its size and scale.

💡As a company scales up, and grows its revenue, it can spread its fixed costs over a larger number of units - and this reduces the average cost per unit.

💡Australia's super sector is expected to see more than 20 mergers a yearbetween now and 2025, according to JP Morgan. And that would cut the sector down from around 170 funds to just under 70.

‍

Ready to win at money?

Sign up for Flux and join 100,000 members of the Flux family

A button to App StoreGoogle Play store button
Excellent  4.9 out of 5
Star rating
No items found.