Australia’s two largest super administrators foreign-owned

Australia’s two largest superannuation fund administrators will now be foreign controlled, after this week’s announcement that Link Group is to be sold to Japan’s Mitsubishi UFJ Trust and Banking Corporation.

Australia’s other major superannuation administrator is Mercer and between them they cover most the major funds administered by the Australian Prudential Regulation Authority.

But this represents a significant change from the situation which existed a mere eight years ago when there were four administrators operating to service APRA-regulated funds – the industry funds-owned Super Partners, Link Group, Mercer and the NSW-Government owned Pillar Administration.

SuperPartners which held the mandates of major funds such as AustralianSuper, Cbus, HESTA and MTAA Super (now Spirit Super) was acquired by Link Group at the end of 2014, while the NSW Government sold Pillar Administration to Mercer in 2016.

The major factor which has altered the superannuation administration landscape has been the numerous superannuation fund mergers which have taken place over the past half-decade, encouraged by APRA.

Significantly, the announcement of the intended sale of Link Group to Mitsubishi UFJ Trust and Banking Corporation was confirmed just days after Link announced that it was set to retain its largest mandate – that of AustralianSuper, albeit that the superannuation fund was taking death benefit claims and member complaints in-house.

While superannuation and pension administration represents a substantial slice of the Link Group business it is not the company’s sole focus either in Australia or overseas but it does appear to have been one of the major attractions for Mitsubishi.

Commenting on the $1.2 billion transaction, Trust Bank senior managing executive and business head of MUFG Investor Services, Takafumi Ihara noted that Trust Bank is one of the largest pension and stock administration providers in Japan.

“We look forward to jointly growing in this space,” he said. “We truly believe that the acquisition of Link Group will further enable MUFG to accelerate its global business expansion with access to Australian superannuation funds and global corporate clients to service”.

Link Group chair, Michael Carapiet said that while the Link Board “has and remains confident about the company’s future, we acknowledge that the Scheme provides shareholders with the opportunity to receive cash value at a significant premium”.