Sun Life Financial has announced that it intends to acquire a majority stake in the US-based retail distribution firm Advisors Asset Management (AAM).
According to Sun Life, the acquisition will be made through SLC Management, the insurer’s institutional fixed income and alternatives asset manager. Sun Life will acquire a 51% stake in AAM for US$214 million subject to customary adjustments with a put/call option to acquire the remaining 49% starting in 2028.
Sun Life is also committed to investing up to US$400 million to launch SLC Management alternative products for the US retail market, which will be distributed by AAM.
Following the acquisition, AAM will become the US retail distribution arm of SLC Management.
"We're thrilled that AAM will be joining SLC Management," said SLC Management president Steve Peacher. "We've 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."
"We've been looking to enter into the retail distribution segment for some time now,” added Peacher. “Adding AAM to our platform allows us to extend our set of world class alternative investment capabilities to new clients and expands the roster of investment solutions that AAM can offer to the U.S. financial advisor market.”
AAM offers a range of solutions and products to financial advisors at wirehouses, registered investment advisors (RIA) and independent broker details. The team is comprised of over 270 professionals. As part of the deal, AAM, will have exclusive rights to market and promote SLC Management's specified alternative investment products to the US retail market.
A company release said that AAM administers US$41.4 billion in assets as of July 31, 2022.
During a Q2 2022 earnings release conference call, Sun Life Financial president and CEO Kevin Strain, said that the company is focusing on its “digital priorities” in Canada. The company reported that in the first six months of 2022, 85% of life insurance applications submitted in Canada were processed digitally.
