Sun Life CEO mulls asset management acquisitions in U.S., Canada

By John Tilak

TORONTO (Reuters) - Canadian insurer Sun Life Financial Inc (Toronto:SLF.TO - News) is scouting for acquisitions to boost its asset management businesses in the United States and Canada, following a string of deals this year, its top executive said on Thursday.

The company is also seeking opportunities in Asia, including the possibility of increasing its stake in its Birla Sun Life Insurance joint venture in India, Chief Executive Dean Connor said in an interview.

The comments come after several recent deals by the company, including plans announced in September to buy New York-based insurer Assurant Inc's (NYSE:AIZ - News) employee-benefits business for $975 million.

In the third quarter it purchased North American real estate investment manager Bentall Kennedy Group for C$560 million and U.S. investment management firm Prime Advisors Inc.

While it probably meant that the company was unlikely to announce another group benefits deal in the U.S. over the next 12 to 18 months, Sun Life is actively looking at other acquisitions, especially in the asset management space, Connor said.

“We’re out there in the deal flow. We’re out there talking to people about different options, about different ideas,” Connor said, adding the company has the balance sheet flexibility and the borrowing capacity to give it the firepower to keep the deal momentum going.

Within asset management, the company is looking in particular at potentially buying companies that provide mezzanine debt and infrastructure equity.

Sun Life has invested billions of dollars in infrastructure projects via debt, he said.

“Could we also acquire a business that does infrastructure equity? So you're not just lending against the project, you're actually owning the project,” he said.

The other area of interest is Asia, where organic growth has been robust.

“There are M&A opportunities in Asia. They're not inexpensive,” Connor said. “We don't need to do acquisitions, but we're certainly looking at opportunities.”

A closely followed deal there would be Sun Life lifting its interest in Birla Sun Life, one of India’s biggest insurance companies.

While Connor said the company is interested in doing that, it “would come down to finding acceptable economics.”

Sun Life shares slipped about 2.4 percent on Thursday, a day after the insurer reported a slightly weaker-than-expected quarterly profit and raised its dividend.

The stock is up about 4.2 percent since the start of the year, compared with a 6.6 percent decline in the broader composite index (.GSPTSE).

(Reporting by John Tilak; Editing by Bernard Orr)