Sun Life Financial, the Canadian financial services giant, is taking over real estate group Bentall Kennedy for $560 million in order to transform its real estate investment management arm into a $47 billion RE and mortgage powerhouse.
Sun Life, which only created an asset management business in 2014, is combining its existing 90-strong real estate and mortgage division with Bentall Kennedy's much larger $27 billion Canadian and US AUM, plus its 1,400 staff.
Though Sun Life is taking over Bentall Kennedy, the new platform will retain the name of Bentall Kennedy to become Sun Life Financial's exclusive real estate investment management division. Sun Life staff will report into Bentall Kennedy's team which will continue to be led by group chief executive officer, Gary Whitelaw, who in turn will report up to Sun Life Investment Management chief executive officer Steve Peacher and join the Sun Life Investment Management leadership group.
The new platform will serve more than 550 institutional clients and investors and will maintain its all its offices including Bentall Kennedy's principal offices in Toronto, Ontario, Vancouver, British Columbia, and Seattle.
Explaining the rationale for the purchase, Dean Connor, chief executive officer of Sun Life Financial, said: “The acquisition of Bentall Kennedy is a perfect fit with Sun Life’s four pillar strategy. It expands and diversifies our asset management pillar, with one of the most respected names in real estate.”
Bentall Kennedy is one of North America's largest real estate investment advisors and the 25th largest in the world. It has a $14 billion Canadian investment management division and a $9 billion US investment management division. It also counts $9 billion of assets for which it performs property services.
It said today that Sun Life had been one of its largest clients since 2004. “We know each other very well,” Whitelaw said. He added: “While the ownership of Bentall Kennedy will change, the platform will remain the same. We will keep the same name, the same leadership and management, and the same locations. Our mission at Bentall Kennedy is to continue to build a North American real estate platform that stands apart for its exceptional client service and high performance culture, all with a strong commitment to fiduciary, ESG and RPI principles.”
Bentall Kennedy’s institutional shareholders, the British Columbia Investment Management Corporation (bcIMC) and the California Public Employees’ Retirement System (CalPERS), have both approved the transaction and will continue to be investors and partners of Bentall Kennedy under Sun Life’s ownership.
“bcIMC strongly supports the transaction, which we believe is beneficial to all stakeholders and ensures that Bentall Kennedy remains well positioned to continue to deliver value to its clients,” said Dean Atkins, acting senior vice president of real estate at bcIMC. “Bentall Kennedy has been a valued and trusted adviser of bcIMC for more than 24 years. We look forward to continuing our close relationship with the firm under Sun Life’s ownership.”
For CalPERS, Paul Mouchakkaa, senior investment officer for real assets, added: “CalPERS looks forward to the future in partnership with Sun Life Investment Management, building on its 17-year longstanding relationship with Bentall Kennedy.”
Sun Life Financial is a 150-year-old financial group with $813 billion assets under management globally. Its investment management team manages $141 billion counting both the investment management arm of Sun Life Investment Management Inc of Canada and Ryan Labs Asset Management Inc of the US that was acquired in April this year.
Hodes Weill & Associates advised Bentall Kennedy. Royal Bank of Canada acted for Sun Life.