Canada's Sun Life Buys US Firm, Eyes High Net Worth Channel

Editorial Staff

2 September 2022

Toronto-listed Sun Life Financial has announced that it intends to buy most of US-based Advisors Asset Management.

The firm stressed that the proposed deal ramps up its ability to serve high net worth clients.

The acquisition is being conducted via SLC Management, Sun Life's institutional fixed income and alternatives asset manager. AAM will become the US retail distribution arm of SLC Management, Sun Life said in a statement yesterday.

AAM provides solutions and products to financial advisors at wirehouses, registered investment advisors and independent broker-dealers. AAM will have exclusive rights to market and promote SLC Management's specified alternative investment products to the US retail market.

As of July 31, AAM oversees $41.4 billion in assets and has 10 offices across eight US states. AAM has a team of more than 270 professionals.

Under the proposed acquisition, Sun Life will buy a 51 per cent interest in AAM for $214 million, subject to customary adjustments with a put/call option to acquire the remaining 49 per cent starting in 2028.

Sun Life said it is committing to invest up to $400 million to launch SLC Management alternative products for the US retail market to be distributed by AAM.

The acquisition of a majority stake in AAM will allow SLC Management and its affiliated investment managers, BentallGreenOak, Crescent Capital Group and InfraRed Capital Partners, to offer their investment strategies to the US high net worth market, Sun Life said.

The transaction is also strategic for AAM, which will expand its product roster to include a range of alternative products in commercial real estate, private credit and infrastructure, Sun Life continued.

"We see significant potential in the alternatives space to deliver steady, reliable returns for our clients, which has been AAM's mission as a trusted resource for financial professionals for more than 40 years," Scott Colyer, CEO, Advisors Asset Management, said. "As we sought to diversify and gain a greater foothold within alternatives, it was crucial to identify a best-in-class partner that shared the same client-focused and team-oriented culture as ours."

The transaction is expected to close in the first half of 2023, subject to receipt of regulatory approvals and satisfaction of customary closing conditions.

Evercore advised Sun Life on the transaction and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel. For AAM, Berkshire Global Advisors acted as financial advisor and Chapman and Cutler LLP acted as legal counsel.

Sun Life isn't the only Canadian firm to have added to its US footprint, including in the wealth management space. The most prominent example has been CI Financial, the Toronto-based financial services group that has bought a range of RIAs and other businesses since 2020, either in whole or via partial stakes.