Top executive is targeting middle market, where revenues can reach about $1 billion, to boost expansion
Sun Life Financial’s asset management unit is targeting its first middle-market private debt acquisition in order to grow its presence in higher-yielding investments.
A top executive told Reuters he could see the company making an acquisition in that part of the market, which comprises of firms with revenues ranging from tens of millions of dollars to $1 billion
Randy Brown, head of insurance asset management at SLC Management, said: "Right now, our capability is really focused on the investment grade part of the private debt market. But there's the whole lower-rated spectrum within the private debt market ... I could see us either acquiring a team or an asset manager focused on that part of the market."
Brown declined to tell Reuters how much SLC was willing to spend on a deal.
The firm will focus on higher-quality middle-market issuers with strong covenant protection, added Brown, who is also chief investment officer at Sun Life. SLC, which has $183 billion under management, offers three private debt and two commercial real estate debt funds in Canada, and is raising capital for similar U.S. offerings.
SLC Management's expansion into infrastructure with the December acquisition of a majority of InfraRed Capital Partners has already reduced its fixed-income investments to 65% of assets under management from 70% previously. Private debt accounts for about a quarter of its fixed income investments, according to its website.