2019

May 06, 2019

Bentall Kennedy - GreenOak Merger

Sun Life Assurance Company of Canada purchases units of the funds listed below, which are established as segregated funds in accordance with the Insurance Companies Act (Canada).

In December 2018, Sun Life Financial Inc. (“SLF”) announced that it intends to merge Bentall Kennedy (“BK”), its North American real estate and property management firm with GreenOak Real Estate (“GreenOak”), a global real estate investment firm. SLF will have a majority stake (56%) in the new combined entity, to be named Bentall GreenOak (“BGO”). The remainder of the ownership is to be divided among senior professionals of BK and GreenOak (roughly 30%), and a strategic partner of GreenOak, Tetragon Financial Group (10-15%).

The transaction is expected to close in the first half of 2019, subject to regulatory approvals and customary closing conditions. Following the close, Bentall Kennedy CEO Gary Whitelaw will assume the role of CEO of the new combined entity, while GreenOak co-founders Sonny Kalsi and John Carrafiell will become President and Senior Managing Partner, UK/Europe, respectively. Paul Zemla will remain President of Investment Management and CIO for BK’s Canadian business.

GreenOak is a global firm with assets under management of $14 billion ($Cdn) and more than 100 employees located in nine offices globally, including London, Tokyo, Seoul, Los Angeles, Madrid, Luxembourg, Milan and New York City. It manages value-add real estate and debt investment strategies in the three regions.

The merger allows BK to further expand its presence geographically outside of Canada as well as add expertise in the value-added real estate segment. BK clients should benefit from a broader and more diversified product offering in upcoming years.

We were informed that there are no special retention measures in place for key professionals of the new firm.  BK professionals will have the ability to purchase equity in the new firm. We believe BK was largely successful in retaining key staff following the firm’s acquisition by Sun Life in 2015.

While the BK name will change, BK has confirmed that the team focusing on the BK Prime Canadian Property and BK Canadian Real Estate Plus Funds will not change. The funds will retain the same investment strategy and policies going forward.

We expect that the greater BK organization will experience some measure of distraction as the transaction closes and operations are merged. However, the low degree of overlap between the two firms’ geographical presences and product offerings should limit the amount of disruption. Both BK funds have been placed in the Additional Monitoring category on the Investment Solutions Watch List. We will continue to monitor the stability of key BK personnel in 2019 as the GreenOak transaction closes.

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