Sun Life to Acquire U.S. Investment Manager Prime Advisors

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.

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