Fund manager Betashares (ASX:BBUS) Capital Ltd has reached an agreement to acquire Bendigo and Adelaide Bank’s superannuation business and enter the Australian superannuation industry.
The acquisition of Bendigo Superannuation Pty Limited (BSPL), sees the company expand beyond ETFs into the broader financial services sector, with superannuation.
At present, Bendigo Superannuation manages assets worth A$1.4 billion and serves more than 19,000 members.
The bank determined that Betashares had the investment scale, expertise and commitment to customer service that would best serve fund members into the future.
Bendigo and Adelaide Bank's chief customer officer Consumer Banking Richard Fennell said: “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 BSPL, in line with the bank’s strategic imperative of reducing complexity.
“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.
“The bank believes this transaction is in the best interests of BSPL’s members and will deliver enhanced retirement outcomes for them over time,” Fennell said.
Expansion into potential $9 trillion market
The expansion into superannuation is highly complementary to Betashares’ ETF business, which recently passed $30 billion in funds under management.
“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,” Betashares CEO Alex Vynokur said.
“We are privileged to serve over one 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.”
With more than A$3.5 trillion in assets, Australia's superannuation system ranks as the world's fourth-largest pension market. It is projected to expand to over A$9 trillion by 2041.
“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," Vynokur said.
"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.”
As part of its overarching growth agenda, Betashares aims to amplify its premier ETF portfolio through investments in product development, customer service and investor education.
The proposed acquisition of Bendigo Superannuation from Bendigo and Adelaide Bank is pending regulatory consent and is slated for completion in 2024.