Sun Life expands alternative investment with $515M InfraRed acquisition

Sun Life Financial Inc. (TSX/NYSE: SLF) has agreed to acquire a majority stake in InfraRed Capital Partners, a global infrastructure and real estate investment manager.

London, UK based InfraRed advises institutional and pooled fund clients on approximately US$12 billion (C$16 billion) in assets under management as of September 30, 2019. InfraRed has more than 175 partners and staff.

Sun Life will acquire an 80% interest in InfraRed for consideration that includes a closing payment of £300 million (approximately US$390 million, C$515 million). InfraRed’s owners will have a put option to sell their remaining interest to Sun Life approximately four years from the closing and Sun Life will have the option to call any remaining interest approximately five years from the closing.

InfraRed will form part of SLC Management, Sun Life’s alternatives asset management business. The acquisition is integral to Sun Life’s strategy of broadening its asset management pillar by extending the capabilities of SLC Management to the benefit of existing and prospective clients.

InfraRed will retain its management structure, operating as a business within SLC Management’s portfolio.

Backed by US $400 million seed capital from Sun Life, InfraRed will launch new funds including a new North American renewable infrastructure fund and new products which will transform InfraRed’s North American capability.

SLC Management is the brand name for the institutional asset management business of Sun Life Financial Inc. under which Prime Advisors, Inc., Ryan Labs Asset Management Inc., and Sun Life Capital Management (U.S.) LLC in the United States, and Sun Life Capital Management (Canada) Inc. in Canada operate. Additionally, the SLC Management brand includes the investment division and General Account of Sun Life.

BentallGreenOak is also part of SLC Management. Sun Life acquired Bentall Kennedy Group for CDN $560 million in 2015. In 2018, Sun Life merged Bentall Kennedy with GreenOak Real Estate to form BentallGreenOak. Sun Life currently owns 56% of BentallGreenOak and has the option to acquire the remaining interest in seven years.

photo credit: InfraRed, Singapore Sports Hub project

News Release

Sun Life to Acquire Majority Stake in InfraRed Capital Partners

Global infrastructure and real estate investment manager to join SLC Management

WELLESLEY, MA, NEW YORK CITY and TORONTO, Dec. 18, 2019 /PRNewswire/ – Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF) today announced that it intends to acquire a majority stake in InfraRed Capital Partners (“InfraRed”), a global infrastructure and real estate investment manager. InfraRed advises institutional and pooled fund clients on approximately US$12 billion (C$16 billion) in assets under management as of September 30, 2019. InfraRed is headquartered in London, U.K. and has more than 175 partners and staff.

InfraRed will form part of SLC Management, Sun Life’s alternatives asset management business. The acquisition is integral to Sun Life’s strategy of broadening its asset management pillar by extending the capabilities of SLC Management to the benefit of existing and prospective clients.

Sun Life will acquire an 80% interest in InfraRed for consideration that includes a closing payment of £300 million (approximately US$390 million, C$515 million). InfraRed’s owners will have a put option to sell their remaining interest to Sun Life approximately four years from the closing and Sun Life will have the option to call any remaining interest approximately five years from the closing.

As part of the transaction, Sun Life has committed to co-invest US$400 million (approximately C$530 million), including general account investments, to support the launch of new InfraRed investment solutions. This co-investment provides alignment between Sun Life and SLC Management’s clients.

“We’re excited to acquire a majority position in InfraRed, which further broadens SLC Management’s alternative solutions to now include infrastructure equity,” said Steve Peacher, President, SLC Management. “InfraRed is a leader in global infrastructure investing in both greenfield and brownfield projects, including renewable energy. These investments have historically provided the returns and horizon that institutional clients are seeking.”

Peacher added, “We established SLC Management in 2014 to develop a line-up of fixed income and alternative strategies to help institutional investors meet their obligations, similar to how we invest our own general account at Sun Life. InfraRed’s proven investment capabilities in infrastructure are a natural extension of SLC Management’s solution set. There is also a strong cultural fit between the two firms.”

“I am delighted to announce this transaction with Sun Life and SLC Management which enables us to drive the growth of our business in the Americas, in particular the renewable energy market,” said Werner von Guionneau, Chief Executive Officer, InfraRed Capital Partners. “SLC Management and InfraRed have complementary capabilities, a similar culture of prudence and long-termism, and proven track records of delivery.”

von Guionneau added, “InfraRed has grown to become a leading international infrastructure investor. To build on this success, our ambition is to continually evolve so that we maximize the potential of our capabilities and address the exciting market opportunities we see in infrastructure overall and particularly around the low carbon energy transition. This transaction is the perfect way to do this and the InfraRed management team and I look forward to working closely with SLC Management and Sun Life to realize our ambitions.”

The transaction is expected to close during the first half of 2020, subject to receipt of regulatory approvals and satisfaction of customary closing conditions.

Skadden, Arps, Slate, Meagher & Flom LLP served as Sun Life’s legal counsel and Fenchurch Advisory Partners served as financial advisors. Ardea Partners International LLP were financial advisors to InfraRed and Weil, Gotshal & Manges LLP served as their legal counsel.

About InfraRed Capital Partners
InfraRed Capital Partners is an international investment manager focused on infrastructure and real estate. It operates worldwide from offices in London, Hong Kong, New York, Sydney, Seoul and Mexico City. With more than 175 professionals, it manages US$12bn of equity capital in multiple private and listed funds, primarily for institutional investors across the globe. InfraRed Capital Partners is authorised and regulated in the UK by the Financial Conduct Authority.
InfraRed implements best-in-class practices to underpin asset management and investment decisions, promotes ethical behaviour and has established community engagement initiatives to support good causes in the wider community. InfraRed has been a signatory of the Principles of Responsible Investment since 2011 and has been awarded triple A+ score in 2019 PRI assessment. Over the past 30 years InfraRed has, initially within Charterhouse Bank then at HSBC and latterly independently, established itself as a highly successful developer and custodian of core infrastructure, renewable energy and real-estate assets that play a vital role in supporting sustainable communities.
For more information go to www.ircp.com

About Sun Life
Sun Life is a leading international financial services organization providing insurance, wealth and asset management solutions to individual and corporate Clients. Sun Life has operations in a number of markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of September 30, 2019, Sun Life had total assets under management of C$1,063 billion. For more information please visit www.sunlife.com.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF.

About SLC Management
SLC Management is the brand name for the institutional asset management business of Sun Life Financial Inc. under which Prime Advisors, Inc., Ryan Labs Asset Management Inc., and Sun Life Capital Management (U.S.) LLC in the United States, and Sun Life Capital Management (Canada) Inc. in Canada operate. Additionally, the SLC Management brand includes the investment division and General Account of Sun Life.

BentallGreenOak is also part of SLC Management. BentallGreenOak is a leading, global real estate investment management advisor and a globally-recognized provider of real estate services. BentallGreenOak includes BentallGreenOak (Canada) Limited Partnership, BentallGreenOak (U.S.) Limited Partnership and the real estate and commercial mortgage investment groups of certain of their affiliates, all of which comprise a team of real estate professionals spanning multiple legal entities.

As of September 30, 2019, SLC Management’s collective operations, including Sun Life’s general account, have assets under management of C$227 billion (US$171 billion).

Media Relations Contact:
Rajani Kamath
Associate Vice-President, Corporate Communications
T. 416-979-6070
rajani.kamath@sunlife.com

Investor Relations Contact:
Yaniv Bitton
Vice-President, Investor Relations
T. 416-979-6496
investor.relations@sunlife.com

SOURCE Sun Life Financial Inc.