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After an extended period of extensive due diligence, Australian Ethical (ASX: AEF) has announced today that its proposed merger with Christian Super will proceed.
The pair signed a successor fund transfer (SFT) deed, which commits the transfer of Christian Super’s 30,000 members and almost $2 billion in funds under management into Australian Ethical Super in late 2022 or early 2023.
The board at the Sydney-based Australian Ethical will remain unaffected. It also confirmed there would be no change to its investment philosophy or process, which will continue to be guided by its ethical charter.
“Since 1986, Australian Ethical has been investing for a better world, carving out positive impact for people, planet and animals through our investments,” Australian Ethical chair Steve Gibbs said.
“We’re delighted to welcome new members who share this vision and want to use the power of their money to support a more sustainable future.”
With no capital consideration under an SFT, details of estimated transition and integration costs, member fee reductions, and other stakeholder benefits will be finalised and provided when Australian Ethical release its 2022 full-year results in August.
Australian Ethical will continue its focus on advocating for positive change in companies, the economy and society more broadly and remains committed to maintaining a culture which celebrates and respects diversity, equality and inclusivity.
“As we look to wind up Christian Super after nearly four successful decades of pioneering values-based investing in Australia, we are pleased to have found an alternative for our members that is not only in their best interest but also champions a similar purpose-driven approach,” Christian chair Neville Cox said.
Also announcing its quarterly results to 30 June today, Australian Ethical confirmed its funds under management (FUM) decreased by 9 per cent over the quarter to $6.2 billion, which it attributes to highly volatile investment markets.
Despite losing an institutional client who redeemed funds roughly equivalent to five per cent of FUM ($105 million), it reported net positive flows of $102 million for the period.
The superfund grew its customer base by 4 per cent, with 4,794 new customers coming on board during the period, which continues the trend over the past year – an overall growth of 17 per cent year-on-year.
The merger is one of several superfund mergers in 2022, including the consolidation of QSuper and Sunsuper in February, which created the $230 billion Australian Retirement Trust (ART), and the proposed HESTA merger with Mercy Super.
Shares in Australian Ethical (ASX: AEF) have increased today by 1.93 per cent as of 12.03 pm to $5.28 per share. However, the share price has dropped by more than 60 per cent since the start of the year.
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