Sun Life Takes Aim at Wealthy U.S. Clients With Advisors Asset Management Deal

What You Need to Know

Sun Life’s SLC Management is buying a 51% stake in Monument, Colorado-based AAM and will make it SLC’s US retail distribution arm.
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-asset firm sees the potential to raise “tens of billions” of new investment from high-net-worth Americans after its deal to buy a majority stake in Advisors Asset Management.

Sun Life on Thursday said SLC Management, which oversees about C$335 billion ($255 billion) of assets, is buying a 51% stake in Monument, Colorado-based AAM for about $214 million and will make it SLC’s US retail distribution arm. AAM has 10 offices in eight states and sells mutual funds and other investment products to financial advisers and brokers.

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

“The institutional market finds you a bit more — that does not happen in the retail market,” Peacher said in an interview. “You’ve got to have wholesalers out there calling on financial advisers, educating them about your product, talking to them about why an allocation to the asset class makes sense and talking to them about why your product might make sense versus somebody else’s.”

The deal traces its roots to about a year ago, when AAM approached SLC about distributing its products to high-net-worth clients, Peacher said. As the talks progressed, SLC decided it wanted more than a commercial relationship and that an ownership stake made sense, he said.

SLC has an option to buy the remainder of AAM starting in 2028. The asset manager is also committing to invest as much as $400 million to introduce alternatives products for AAM to distribute.