Sun Life to acquire a majority stake in Advisors Asset Management: Sun Life Financial Inc.

2022 SEP 12 (NewsRx) -- By a News Reporter-Staff News Editor at Mergers & Acquisitions Daily News -- Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF) announced that it intends to acquire a majority stake in Advisors Asset Management, Inc. (“AAM”), a leading independent U.S. retail distribution firm, through SLC Management, Sun Life’s institutional fixed income and alternatives asset manager. AAM will become the U.S. retail distribution arm of SLC Management.

AAM provides a range of solutions and products to financial advisors at wirehouses, registered investment advisors (“RIA’s”) and independent broker-dealers. AAM will have exclusive rights to market and promote SLC Management’s specified alternative investment products to the U.S. retail market. AAM oversees $41.4 billion (approximately C$55 billion) in assets as of July 31, 2022. With 10 offices across eight U.S. states, AAM has a team of more than 270 professionals.

Sun Life will acquire a 51% interest in AAM for US$214 million (approximately C$280 million) subject to customary adjustments with a put/call option to acquire the remaining 49% starting in 2028. As part of the transaction, Sun Life is 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.

“We’re thrilled that AAM will be joining SLC Management,” said Steve Peacher, President, SLC Management. “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. 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,” added Peacher.

With the growing demand among high-net-worth (“HNW”) investors for alternative assets in the U.S., the acquisition of a 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. HNW market. The transaction is also strategic for AAM, which will expand its product roster to include a range of alternative products in commercial real estate, private credit and infrastructure.

“We see significant potential in the alternatives space to deliver steady, reliable returns for our clients, which has been AAM’s mission as a trusted resource for financial professionals for more than 40 years,” said Scott Colyer, CEO, Advisors Asset Management. “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. SLC Management’s common values and interest in establishing a durable, long-term partnership figured heavily into the decision to join forces with one of the premier alternatives asset managers in the world.”

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

Evercore acted as financial advisor to Sun Life for this transaction and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel. For AAM, Berkshire Global Advisors acted as financial advisor and Chapman and Cutler LLP acted as legal counsel.

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