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Sun Life Financial Inc. SLF-T is acquiring a 51-per-cent stake in U.S.-based Advisors Asset Management Inc. for US$214-million, with an option to acquire the remainder of the company down the road.

The deal is being done through SLC Management, Sun Life’s institutional fixed income and alternatives asset manager, and Colorado-based AAM will become the new U.S. retail distribution arm for SLC Management, Sun Life said in a news release.

AAM provides a wide range of products and services to financial advisers at full-service brokerage firms, registered investment advisers and independent broker-dealers. With 10 offices across eight U.S. states, AAM oversaw US$41.4-billion in assets as of July 31.

Sun Life will have an option to acquire the remaining 49 per cent of AAM starting in 2028.

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As part of the deal, Sun Life is also committing to invest up to US$400-million to launch SLC Management alternative products for the U.S. retail market, to be distributed by AAM.

Sun Life said that with the growing demand among high-net-worth investors for alternative assets in the United States, the 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 U.S. high-net-worth market.

Steve Peacher, president of SLC Management, said in the release that his company has been looking to enter the retail distribution segment for some time and has “seen a sustained increase in demand for alternatives from the high-net-worth and ultra-high-net-worth market as they look to add new sources of yield and total return.”

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Mr. Peacher said the deal will allow SLC Management to extend its alternative investment capabilities to new clients and expand the range of investment solutions it can offer to the U.S. financial adviser channel.

AAM chief executive officer Scott Colyer said his company sees potential in the alternatives space to deliver steady and reliable returns to clients.

“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,” Mr. Colyer said.

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

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 0:02pm EDT.

SymbolName% changeLast
SLF-T
Sun Life Financial Inc
+0.37%74.07

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