Sun Life targets affluent U.S. clients with asset management deal with advisors

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What do you want to know

  • Sun Life’s SLC Management is buying a 51% stake in AAM, based in Monument, Colo., and will make it the retail distribution arm of SLC in the United States.
  • The deal gives SLC a way to expand beyond its current customer base of institutional investors and sell products directly to wealthy Americans.

Sun Life Financial Inc.’s alternative assets firm sees the potential to raise “tens of billions” in new investment from wealthy Americans after its deal to buy a majority stake in Advisors Asset Management.

Sun Life said Thursday that SLC Management, which oversees about C$335 billion ($255 billion) in assets, is buying a 51% stake in Monument, Colo.-based AAM for about $214 million and will make it the U.S. retail distribution arm of SLC. AAM has 10 offices in eight states and sells mutual funds and other investment products to financial advisors and broker-dealers.

The deal gives SLC – which is owned by Toronto-based Sun Life and operated from Wellesley, Mass. – a way to expand beyond its current customer base of institutional investors and sell products directly to wealthy Americans. . This sales infrastructure would be difficult and time-consuming to build for Sun Life on its own, and the AAM team expects to be able to raise billions for SLC’s products over the next five years, the chairman said. from SLC executive Steve Peacher.

“The institutional market finds you a bit more — that doesn’t happen in the retail market,” Peacher said in an interview. “You need to have wholesalers who call financial advisors, educate them on your product, explain to them why an asset class allocation makes sense, and explain to them why your product might make sense over someone’s else.”

The deal dates back about a year, when AAM approached SLC to distribute its products to high net worth customers, Peacher said. As the talks progressed, SLC decided it wanted more than a business relationship and that an ownership stake made sense, he said.

SLC has an option to buy the rest of AAM starting in 2028. The asset manager is also committing to invest up to $400 million to introduce alternative products to be distributed by AAM.

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