The new president of Sun Life Financial Inc.'s investment management arm says he'd like to offer more investment funds and expand the business internationally in the next five years.
"We've got a good platform here with Sun Life to export and develop in the U.S. and into Asia," Carl Bang, who joined Sun Life Investment Management Inc. in late May, said in an interview.
Sun Life already has a presence abroad in insurance and wealth management, but right now the company's recently-created asset management business is focused on the Canadian market. It launched three pooled funds, respectively focused on real estate, commercial mortgages and private debt, on April 1. The asset management business' aim is to attract institutional investors such as defined-benefit pension plans, as well as to manage Sun Life's own assets; this aligns the outcomes for the company's capital with that of its funds' investors. The group is run by Steve Peacher, Sun Life Financial's CIO, but Mr. Bang oversees the group's investment strategy, among other things.
In addition to the planned geographical expansion of their client base, Mr. Bang and his team are already thinking about ways to add to their fund offerings. Investors are interested in diversifying their assets into a U.S.-domiciled real estate fund, but the tax complications could take some time to figure out for Canadian investors, he said.
"What we're hearing from some Canadian clients is, some of them are looking to the U.S. market as a way to diversify and also to get access to what they deem as more reasonably priced real estate…" Mr. Bang said. "If you talk to me, I'd say there's great opportunities in Asia, but you won't see the Canadian institutional investors investing in Asian real estate, apart from the very large ones."
Canada's defined-benefit pension plan market is more than $1-trillion in size, says Eugene Lundrigan, Sun Life Investment Management's chief operating officer. Sun Life has initially been talking to pension plans whose assets are in the range of $300-million to $500-million, with $10-billion being the larger end of what they'd target. These are funds that are big enough to have a private asset class allocation, but small enough to have their own internal asset management teams.
However, Canada is a competitive market and other companies such as AGF Management Ltd. and fellow insurer Manulife Financial Corp. are also beefing up their teams to try to attract new institutional business. Sun Life is trying to set itself apart by offering a variety of products, but not trying to be everything to everyone.
"We're looking to be big in our niche," Mr. Lundrigan said. "You don't see us offering an equity fund. We're trying to operate in the areas we think we're really good at."