Insurer completes deal for $5.1b in assets under management

by Nicolas Heffernan02 Apr 2015
Sun Life Financial completed the purchase of Ryan Labs Inc. today, continuing the trend of Canadian insurers venturing into the wealth management space.

"Extending our asset management footprint in the U.S. through this acquisition is an important milestone for Sun Life Investment Management," said Steve Peacher, President, Sun Life Investment Management and Chief Investment Officer, Sun Life Financial.

“The acquisition builds on our successful launch of Sun Life Investment Management Inc. in Canada, and continues to grow our asset management business as part of Sun Life Financial's four-pillar enterprise strategy."

Ryan Labs has about $5.1 billion assets under management for 150 clients averaging about US$34 million per customer. Ryan Labs specializes in liability driven investing (LDI) and total return fixed income strategies for institutional clients throughout the United States.

The completion of the deal is part of a larger trend that’s seeing Canada’s major insurers including Manulife and Great-West venture into the wealth management space, chiefly to counter the tough current economic and regulatory environment.

“[They] are pushing companies to changing their products – they want less costly products,” said Giguere. “The low interest rates are really making insurance expensive and regulations and the capital requirements on insurance are pretty high. It’s less expensive or less risky for insurance companies in the wealth management space.”

But the change has also been forced by a new wave of advisors, who are advocating the place of life insurance in a broad financial plan.

“We are seeing brokers and advisors look at things more holistically, where they look at coverage for insurance and wealth and savings,” said Nazir Valani, a partner at KPMG, and senior actuary for Life & Pensions. “They want to provide both so the insurance companies are reacting to this. Definitely there is a move to, ‘Let’s sell insurance and let’s also get into the wealth management business.’”