AvSuper and Australian Retirement Trust (ART) have inked a memorandum of understanding, exploring a merger of the two Australian superannuation funds. The agreement will kick off a due diligence period.

AvSuper said a previously proposed merger between AvSuper and Commonwealth Superannuation Corporation was unable to proceed under the current legislative timetable, as required changes were unlikely to be delivered in 2023.

“The reasons for our original decision to initiate the EOI process remain, and a merger continues to be a necessary step forward in members’ best interests,” said the fund in a Feb. 15 announcement. “As an immediate next step, we reviewed our shortlisted funds from the initial EOI process.”

ART has proven to be an interested and strong candidate throughout the process.

ART was formed in 2022 following the merger of Sunsuper with QSuper and is one of the largest super funds in Australia with more than $240 billion in funds under management.

“We are confident that this merger will be favorable to our members in the short and long term,” said AvSuper.

AvSuper has a diversified investment portfolio covering a wide range of assets, including property, infrastructure, shares and shorter-term money-market instruments. ART has a strategic allocation of 8.5 percent to property.