SLC Management, Sun Life’s fixed income and alternatives asset manager, plans to buy a majority stake in Advisors Asset Management (AAM), a U.S. retail distribution firm.
Sun Life will acquire a 51% interest in AAM for $214 million with a put/call option to acquire the remaining 49% of the firm in 2028. Effectively, AAM oversees $41 billion in assets and will now become the U.S. retail distribution arm of SLC Management, which has $260 billion in assets under management.
“We’ve seen a sustained increase in demand for alternatives from the high-net-worth and ultra-high-net-worth market as they look to add new sources of yield and total return,” said Steve Peacher, president of SLC Management, in a statement. “We’ve been looking to enter to the retail distribution segment for some time now. Adding AAM to our platform allows us to extend our set our world class alternative investment capabilities to new clients and expands the roster of investment solutions that AAM can offer to the U.S. financial advisor market.”
As part of the transaction, Sun Life is committing to invest up to $400 million to launch SLC Management alternative products for the U.S. retail market to be distributed by AAM.
SLC Management intends to boost investment strategies of its affiliate managers — BentallGreenOak, Crescent Capital Group and InfraRed Capital Partners — distribution to the U.S. HNW market. BentallGreenOak is a global real estate investment manager, while InfraRed is an infrastructure manager. Crescent, meanwhile, is a global alternative credit investment management focused on providing private credit financing to middle-market companies in the U.S. and Europe and invests in high-yield bons and broadly syndicated loans.
For AAM, the deal will expand its product roster to include the alternative products offered by SLC affiliates.
“We see significant potential in the alternatives space to deliver steady, reliable returns for our clients, which has been AAM’s mission as a trusted resource for financial professionals for more than 40 years,” said Scott Colyer, CEO of Advisors Asset Management, in a statement. “As we sought to diversify and gain a greater foothold within alternatives, it was crucial to identify a best-in-class partner that shared the same client-focused and team-oriented culture as ours. SLC Management’s common values and interest in establishing a durable, long-term partnership figured heavily into the decision to join forces with one of the premier alternatives asset managers in the world.”
Officials said the transaction is expected to close in the first half of 2023.