NAS retains Prime Super ahead of proposed merger

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The $4 billion Prime Super rural industry fund has retained NAB Asset Servicing as its custodian ahead of a proposed merger with Combined Super, but the funds are likely to keep two administrators until the dust settles on the integration.

Lachlan Baird, Prime’s chief executive, said the original contract with NAS was in 2006, so it was time for a thorough review and competitive tender, which the fund ran itself.

“We looked at the services and benefits we wanted and [NAS] gave us a few little enhancements,” he said.

The custody part of the proposed integration, which is subject to due diligence, is relatively straight forward. Combined, with assets just short of $1 billion, is invested primarily in unit trusts and does not use a master custodian, such as NAS, across its portfolio.

However, the two funds use very different administrators. Prime uses Link Group, which has lots of industry fund and other super clients, while Combined uses Mainstream BPO, which is best known as an administrator of managed funds.

Prime has had quite a bit of experience with mergers, its most recent being in 2014 when it took over the $500 million Health Industry Plan.

That said, there are a lot of examples of mergers falling over after discussions and due diligence.

– G.B.

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