By Rita Trichur
Sun Life Financial Inc. said Tuesday it will acquire Redmond,
Wash.-based investment manager Prime Advisors Inc., marking the
Canadian insurer's latest move to expand in the U.S.
asset-management market.
Financial terms of the purchase--Sun Life's third
asset-management deal since January--weren't disclosed. The
Canadian insurance company has made growth in asset management a
focus and created its asset-management division last year.
Prime, which had $13 billion in assets under management at the
end of May, provides insurance companies in the U.S., Bermuda and
Cayman Islands with customized fixed-income portfolios.
U.S. insurers, grappling with low interest rates, are
increasingly outsourcing investment assets to third parties such as
Prime to improve returns and cut costs. In the U.S., outsourced
insurance assets are estimated at $1.2 trillion, according to
Cerulli Associates.
"Our goal has been to create a North American-wide asset
manager," said Steve Peacher, chief investment officer at Sun Life
and president of its investment management arm.
Sun Life is Canada's third-largest insurance company by assets.
This month it said it would acquire real-estate manager Bentall
Kennedy, which operates in Canada and the U.S., for 560 million
Canadian dollars ($455 million). In late January, Sun Life
announced its acquisition of New York-based Ryan Labs Asset
Management, which focuses on liability-driven investing and
fixed-income solutions for institutional clients.
"The addition of Prime together with our recently announced
acquisition of Bentall Kennedy and completed acquisition of Ryan
Labs Asset Management will grow Sun Life Investment Management's
third-party assets under management to a combined C$50 billion in
just over a year," Mr. Peacher said.
Prime Chief Executive Don McDonald will remain with the company
after the acquisition closes, which is likely to occur in the third
quarter of this year. Sun Life's ownership could allow Prime to
hire more employees and "better compete for larger mandates," Mr.
McDonald said.
Write to Rita Trichur at rita.trichur@wsj.com
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