BetaShares has announced it has reached an agreement to acquire Bendigo and Adelaide Bank’s superannuation business and enter the Australian super industry.
In a statement on Wednesday, BetaShares said the move was “a transformational step” for the firm and marked the first major initiative as part of its longer-term strategy to expand into the wider financial services sector.
“Over the course of the past 12 years, BetaShares has developed a market-leading position in the Australian ETF industry, helping democratise investing by expanding choice, lowering costs and improving investor education and engagement,” said BetaShares chief executive officer Alex Vynokur.
“We are privileged to serve over 1 million Australian investors and their financial advisers today. Over the course of the next decade, we have a vision for the firm to continue developing into a leading, independent Australian financial services business.
“We are driven by our vision to help Australians achieve financial progress and we are motivated to bring more client focus, education, and genuine innovation into the Australian superannuation industry.”
BetaShares suggested that its expansion into super is highly complementary to its existing ETF business which recently passed $30 billion in funds under management.
As part of its acquisition strategy, the firm said it intends to use its investment scale, experience, and operational and risk management capabilities to grow its presence in superannuation and deliver better outcomes to members.
“For most Australians, superannuation is the largest asset outside of the family home and plays a key role in each Australian’s wealth journey and retirement outcomes,” said Mr Vynokur.
“As such, while ETFs will always remain the bedrock of our business, we are equally determined to bring our ethos of diversification, cost effectiveness, investor education, and engagement into the superannuation sector, and it is a natural next step in our growth strategy.
“We have been actively exploring entry strategies for some time and have a long-term plan to significantly invest in building our superannuation presence.”
The planned acquisition of Bendigo Superannuation from Bendigo and Adelaide Bank remains subject to regulatory approvals and is expected to complete in 2024. Bendigo Superannuation currently has assets of $1.4 billion and more than 19,000 members.
Richard Fennell, chief customer officer - consumer banking at Bendigo and Adelaide Bank, said that the bank believes the transaction is in the best interests of Bendigo Superannuation’s members and will deliver enhanced retirement outcomes for them over time.
“Following a review that considered the interests and needs of our members and the future investment required in the business, the bank has decided to proceed with the sale of [Bendigo Superannuation], in line with the bank’s strategic imperative of reducing complexity,” he said.
“BetaShares was selected following a process that took into consideration several factors, including alignment with our own strong customer focus and the ability to enhance member outcomes. As part of this process, the bank has prioritised a smooth transition to a new provider.”
Bendigo and Adelaide Bank said that fund members are expected to experience minimal disruption due to the sale. Additionally, a number of the bank’s employees will transfer to BetaShares to ensure continuity of service and offering to fund members.
