The client situation
The increasing regulatory pressure from APRA in the form of a stronger prudential framework, intensifying supervision activities and the recent Your Future Your Super reforms has intensified merger activity within the superannuation market.
We had been discussing merger strategies, criteria and potential partners with our client for some time and by the middle of 2020 they were ready to proceed with a more in-depth due diligence process. As with many funds at this stage of the process, planning resources to attend to business-as-usual activities alongside such a significant project was proving a challenge. We were asked to provide project management support in the form of a partial secondment of one of our Consultants.
The key focus of this role was to support the project management of the due diligence process, including to set up and maintain an overarching governance framework with the proposed merger partner and internal staff members, ensuring the exchange of information and due diligence work ran smoothly.
We worked with the Executive to form due diligence scopes of work and provided independent challenge on the advisers proposed approach and views, based on our knowledge of the specific transaction and wider merger experience. We also acted as an agent for the fund with external advisers.
Using our strong communication and technical skills, we were able to ensure that both parties were having the right conversations with the right people. Overarching all the work we do on mergers is our in depth knowledge of the market – we know what has and has not worked well for others – and our ability to use this knowledge to support the fund in navigating the various obstacles that present themselves through any merger process.
In addition, we also:
- Worked closely with the Executive to form an overarching merger project plan.
- Attended joint working group meetings with both funds and supported them in addressing any technical issues arising.
- Supported the Executive in drafting board papers and providing regular updates to the regulators.
Outcome for the client
The key areas that received positive feedback from our client throughout our involvement was:
- Our integral support in bringing all workstreams and stakeholders together to meet the tight timelines set.
- Our challenge of advice reports from other parties, highlighting where advice needed to be refined and/or suggesting how it could be communicated in a more user friendly manner.
- Our determination in getting things done, in the requisite timeframe, without compromising on the detail that was required to be investigated.
Given our involvement across a variety of aspects of the merger during our initial role, we have subsequently been asked to continue our involvement to support the Executive in planning for deal negotiations in the form of the implementation deed and plans.