New Sun Life Investment Management funds give Defined Benefit pension plans greater access to the private asset class funds

April 6, 2015
 

Plan sponsors may wish to consider whether this investment news has any implications for the investment options available within their DB INVO plans. Sun Life Assurance Company of Canada purchases units of the funds listed below, which is established as segregated funds in accordance with the Insurance Companies Act (Canada).

We’re excited to announce that we’ve added three new private asset class pooled funds to the Defined Benefit (DB) investment platform, all from Sun Life Investment Management.

  • Sun Life Private Fixed Income Plus Fund
  • Sun Life Canadian Commercial Mortgage Fund
  • Sun Life Canadian Real Estate Fund

These additions will bring the exceptional investment capabilities we have built over the decades for our insurance business to external clients such as defined benefit pension plan. Smaller DB pension fund investors can face challenges in accessing private asset classes and its diversification advantages. Private asset class fixed income exposure can play an important role in pension fund de-risking strategies, investing to achieve higher yield with lower correlation to the equity markets.

About the funds
Investments for the three funds are sourced and managed by the same experienced professionals who are responsible for the Canadian private fixed income, commercial mortgage and real estate portfolios in Sun Life Assurance Company of Canada’s insurance general account.

  • Sun Life Private Fixed Income Plus Segregated Fund focuses primarily on private fixed income investments, with the balance in public debt securities. The fund capitalizes on pricing inefficiencies often found in the private fixed income market – and looks for opportunities in various regions, including North America, the UK, and Australia.
  • Sun Life Canadian Commercial Mortgage Segregated Fund is a diversified portfolio of primarily fixed-rate first mortgages secured by high-quality income-producing office, retail, industrial, and multi-family rental properties located in growing urban areas across Canada.
  • Sun Life Canadian Real Estate Segregated Fund is a diversified portfolio of high-quality, well-built and well-maintained commercial real estate assets in growing urban areas across Canada.

Performance Objectives

Fund

Benchmark

Performance Target

Sun Life Private Fixed Income Plus Segregated Fund

100% FTSE TMX Canada All Corporate Bond Index

+0.50% to 1% on a 4-year rolling basis

Sun Life Canadian Commercial Mortgage Segregated Fund

60% FTSE TMX Canada Short Term Overall Bond Index

40% FTSE TMX Canada Mid Term Overall Bond Index

+0.50% to 1% on a 4-year rolling basis

Sun Life Canadian Real Estate Segregated Fund

IPD Canada Quarterly Property Fund Index

On a 4-year rolling basis


Fund structure
The segregated funds are structured to replicate the transactional process of the underlying funds. Since most of the assets in the three funds don’t have an active public market, the funds are less liquid than more traditional investments.
 

Fund

Valuation Frequency and Liquidity Availability

Initial and Subsequent Minimum Subscription Amounts

Sun Life Private Fixed Income Plus Segregated Fund

Monthly

$500,000

Sun Life Canadian Commercial Mortgage Segregated Fund

Monthly

$1,000,000

Sun Life Canadian Real Estate Segregated Fund

Quarterly

$1,000,000


About Sun Life Investment Management
Sun Life Investment Management (sunlifeinvestmentmanagement.com) is the brand name under which the investment operations of Sun Life Assurance Company of Canada (Sun Life) and its affiliate Sun Life Investment Management Inc. operate. Sun Life Investment Management Inc. is a Canadian registered portfolio manager, investment fund manager and exempt market dealer.

Sun Life Investment Management’s team of over 200 people bring extensive experience managing over $110 billion in assets for Sun Life. Their private asset class leadership is supported by Sun Life’s position as one of Canada’s largest and longstanding institutional investors, with an established governance and risk management culture.

Questions?
Please contact your Sun Life Financial Group Retirement Services representative.