Life insurer swoops for asset management firm

by Paul Lucas02 Mar 2016
Perhaps best known for its range of life insurance products, Foresters, which has its base in Toronto, has made a significant acquisition as it moves into the asset management area.

The company has entered an agreement with Proj Fox Acquisition Inc. to secure 100 per cent of shares from Aegon Fund Management (AFM) and Aegon Capital Management (ACM). It is expected that the transaction will be closed in May after it receives approval from Canadian regulatory authorities. Meanwhile, the Foresters Life Insurance Company will indirectly purchase both Aegon Capital Management and Aegon Fund Management from Proj Fox, which is being used as an intermediate.

According to Tony Garcia, the president and CEO of Foresters, the acquisition will enable the company to move into the asset management market.

“The Foresters team looks forward to working with ACM and AFM, along with our network of independent advisors, to offer a broader range of financial solutions, products and services to our existing and future Canadian members and customers,” he said.

“We also see strong synergies between our Canadian life and annuity products and services and AFM’s product offerings in the retail space through their imaxx mutual funds. On the institutional side of the business, we see substantial growth opportunities for us, given ACM’s solid track record in this space.”

Meanwhile, Gregory Ross, the head of fixed income at ACM and its chief investment officer, also welcomed the move.

“Joining the Foresters family is an exciting new growth phase for our organization,” he said. “We’ve been successfully building our third party business as a result of our disciplined and time tested investment process for the past 14 years. This is an excellent opportunity to substantially develop the retail and institutional offerings of ACM and AFM along with bringing the best of Foresters globally to Canada, yet still provide the returns that our clients have come to expect.”

As part of the transaction, Foresters is set to acquire around $10 billion in equity and fixed income assets – this will bring its total level of funds under management to $44 billion.