Wayne Swan, the former Australian treasurer and deputy prime minister, said the Cbus pension fund was hunting for acquisitions to expand its assets under management to A$150bn (US$108bn).
Swan took over as chair of the construction industry’s A$67bn pension fund this month. It is already planning to absorb Media Super, which will add A$5.9bn, and EISS Super, a A$6.4bn energy industry fund, this year.
Australia’s A$3.3tn superannuation sector is rapidly consolidating after the Australian Prudential Regulation Authority put pressure on smaller or poorly performing funds to merge with larger rivals. This has resulted in 15 mergers in the year to October and raised expectations that the market will boil down to a handful of “megafunds”.
Swan, who as treasurer guided the country’s economy through the 2008 financial crisis, said the construction workers’ fund was in talks to make more deals. “A lot of funds are searching for a partner. We are talking to them as are others,” he said.
He added that Cbus, which was one of the country’s first industry funds, should not lose its “blue and pink collar” identity as it expands. “We don’t just want to grow for growth’s sake. We don’t see ourselves as a generalist fund,” he said.
Swan argued that the fund’s core strength needed to be organic growth, as opposed to expanding its scale through mergers. The Cbus growth fund delivered returns of almost 20 per cent in the year to June 2021.
The appointment of Swan, revealed in July, proved contentious among some of the unions whose workers the fund represents. The Construction, Forestry, Maritime, Mining and Energy Union NSW called his choice an “insult” to its workers, as laws introduced while Swan was in government had cost the unions millions of dollars when protecting the rights of their members.
His dual roles as chair of Cbus and president of the Australian Labor party was also criticised.
Swan said his job as chair of the Cbus board would involve bringing people together but dismissed the suggestion that his role with the ALP should exclude him from the position.
“There’s too much partisan debate, particularly about super. I would like to see more consensus about things,” he said.
Part of the Cbus strategy will be to capture the value of the transition from a fossil fuel-based economy to renewable energy. He argued that industry funds, unions and the government needed to work together to stimulate investment in the post-coronavirus pandemic economy.
“A healthy super sector plays a role in recapitalising the economy as it did during the GFC [global financial crisis],” he said. “We should be talking about strengthening and refreshing the Australian economy for the next 20 years.”