Sun Life Financial on Tuesday announced the launch of a new investment management subsidiary, Sun Life Capital Management (U.S.).
SLC, as the new entity is known, replaced Sun Life Investment Management, which the parent insurance company established in 2013.
The new money management unit combines SLIM's three boutique money management subsidiaries with the internal investment team responsible for managing the $101 billion company's general account, said Thomas P. Murphy, senior managing director and head of institutional business, in an interview.
As of March 31, the money management units managed a total of $58 billion for about 1,000 institutional investors.
The new company has two units — fixed income and real estate — to provide institutional investors with a one-stop shop for asset-liability matching investment strategies, and outsourced investment services for insurance companies, Mr. Murphy said.
Sun Life's two fixed-income boutiques — Ryan Labs Asset Management and Prime Advisors, acquired in April and July 2015, respectively — will continue to manage assets autonomously under the SLC Management name, joined by Sun Life's general account investment team, Mr. Murphy said.
Ryan Labs has particular expertise in managing public and private fixed income in total return and liability-driven investment approaches, while Prime Advisors is an insurance outsourcing specialist manager.
On the real estate side, Bentall GreenOak, the result of a merger earlier this year between Sun Life's Bentall Kennedy unit (acquired in 2015) and GreenOak Real Estate, manages both global real estate equity and debt independently under the Bentall GreenOak name.
The creation of Sun Life Capital Management was driven by two "megatrends," the move to derisk many corporate pension funds through a move to liability-driven investing and strong growth in insurance investment outsourcing, Mr. Murphy said.
By integrating the Sun Life Investment Management asset managers on a single investment platform and centralizing sales and distribution, institutional investors and insurance companies will have access to the full suite of LDI tools, ranging from public fixed income to private credit and real estate equity and debt to facilitate asset-liability matching, Mr. Murphy said.
In the search for "higher-octane fixed income" to increase returns in asset-liability matched portfolios, Mr. Murphy said more defined benefit plans are moving into private credit and real estate debt, the demand for which SLC intends to meet.
More acquisitions of companies or team liftouts are possible over time to broaden SLC's investment capabilities, Mr. Murphy said, particularly in higher risk areas of fixed-income management such as mezzanine and infrastructure debt.