Sun Life Financial Inc.SLF announced that its unit Sun Life Global Investments (Canada) Inc. has closed the buyout of both Excel Funds Management Inc. and Excel Investment Counsel Inc., collectively referred to as Excel Funds. The acquisition will expand the company's wealth management business in Canada. The transaction was announced on Sep 7 last year.
Sun Life is aggressively trying to grow its Global Asset Management Business, which has been witnessing a growing asset base for the past many quarters. Sun Life sets target for Sun Life Investment Management asset-under-management to the tune of $100 billion over the next few years.
Sun Life Financial created a new third-party asset management business, Sun Life Investment Management, in 2015. This is intended to foster its investment capabilities in private fixed income, mortgages and the real estate by investing in pension plans and other institutional investors. This initiative consolidates the company's Asset Management pillar that provides higher return on equity, lower capital and lower volatility and has potential for an earnings upside.
Notably, addition of Excel Funds will complement Sun Life Global Investments' portfolio as both share a compatible product line-up. Excel Funds investment manager specializes in the emerging markets funds with about $700 million in assets under management.
Sun Life considers acquisitions a prudent approach to ramp up its growth profile. A strong capital position supported by a sustained solid operational performance cushions Sun Life Financial in pursing growth initiatives.
Sun Life carries a Zacks Rank #3 (Hold). Shares of Sun Life have gained 3.2% in the last three months, underperforming the industry 's increase of 4.2%. Nonetheless, we expect the company's solid operational performance, strategic acquisitions and a robust capital position to help the stock turn around in the near term.
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