Sun Life Will Acquire Prime Advisors

TORONTO—Following its agreement two weeks ago to acquire Bentall Kennedy, Sun Life Financial has made another move to broaden its asset management platform by inking a deal to purchase employee-owned Prime Advisors Inc., a Redmond, WA-based investment management firm. Terms of the all-cash deal were not disclosed.

As of May 31, Prime had approximately US $13 billion in assets under management. The company provides customized fixed-income portfolios to insurers based in the US, Bermuda and the Cayman Islands. The acquisition is expected to close in the third quarter; when it does, it will bring AUM by Sun Life Investment Management, the Toronto-based life company's asset-management arm, to US $40 billion.

Following completion of the transaction, Prime will operate as a standalone unit of Sun Life Investment Management. Prime will retain its brand and maintain its offices in Redmond, WA and Windsor, CT. It will continue to be managed by its current team, headed by CEO Don McDonald, who will report to Steve Peacher, president of Sun Life Investment Management and CIO of Sun Life Financial.

At present, Prime's single largest asset management sector is tax-exempt municipal bonds, which comprised $3.8 billion of its portfolio at the end of 2014. CMBS accounted for a little more than 1.5% of that portfolio at $200 million. That's set to change, however: McDonald told Bloomberg Business on Tuesday that his company would seek to offer new products, including direct investment in commercial real estate.

Berkshire Capital Securities LLC served as financial advisor and Weil, Gotshal & Manges LLP as legal advisor to Sun Life. Lane Powell PC served as the legal advisor to Prime.