Sun Life to acquire real estate investment firm Bental Kennedy for C$560 million
16 June 2015
Sun Life Financial yesterday said it was acquiring North American real estate investment manager Bentall Kennedy Group for C$560 million, as part of the financial services group's larger strategy to expand its capabilities in commercial property.
The deal would see Bentall Kennedy, a provider of property management, real estate investment and leasing services in Canada and the US become part of Sun Life Investment Management, the company said in a news release.
The deal would position Sun Life to leverage the increasing demand by pension funds and other asset managers for higher-yield real estate assets, Sun Life chief investment officer Steve Peacher said in an interview yesterday.
According to Peacher, the company thought the demand for real estate among institutional investors was only increasing and by owning Bentall Kennedy, Sun Life positioned itself to take advantage of that trend.
Bentall Kennedy would retain its brand and become the real estate investment management platform of Sun Life.
Pension funds British Columbia Investment Management Corporation (bcIMC), the California Public Employees' Retirement System (CalPERS) and Bentall management, had together held a one-third stake in Bentall.
According to the two institutional shareholders, they would continue to be Bentall Kennedy clients under Sun Life's ownership.
The deal would see Sun Life add C$27 billion in assets under management and a company servicing 91 million square feet of properties, the company said in a statement yesterday.
The acquisition fits with Sun Life's ''expertise in asset-liability management, fixed income and alternative asset classes by extending our real estate and mortgage investment capabilities,'' Peacher said in the statement.
Sun Life had been adding to the assets of its asset management arm. It acquired Ryan Labs Inc this year to add $5.1 billion in assets under management and expand in the US. It joins insurer Manulife Financial Corp as it sought to benefit from higher returns on real estate as low interest rates hampered growth.
Bentall Kennedy Group, one of North America's largest real estate investment advisers, has units in Canada and the US. The combined operations would include C$47 billion in real estate and mortgage assets and 550 institutional clients and investors, according to the statement. Sun Life saw the deal add 4 cents to 2016 estimated earnings per share, a slide presentation on Sun Life's website showed.