Chief Investment Officer Departure at BentallGreenOak
Plan sponsors may wish to consider whether this investment news has any implications for the investment options available within their plans. Sun Life Assurance Company of Canada purchases units of the fund listed below, which is established as a segregated fund in accordance with the Insurance Companies Act (Canada).
On September 30, 2019, BentallGreenOak (“BGO”) informed us that Paul Zemla, Managing Partner and Head of Canadian Investment Management, left the firm. Mr. Zemla had been with the firm since 1998. Mr. Zemla acted as the Chief Investment Officer (CIO) at BGO. He was part of a team of portfolio managers for the Bentall Kennedy Prime Canadian Property Fund (“BK Prime”) and Bentall Kennedy Canadian Real Estate Plus Fund (“BK Plus”).
Mr. Zemla’s departure is a loss from an investment perspective. He is a well-seasoned real estate professional. BGO indicated that they initiated Mr. Zemla’s departure. They noted he conducted his duties with integrity and professionalism, and he was an integral part of the firm’s growth. However, Mr. Zemla tended to focus on executing real estate transactions (acquiring and selling properties) and the firm felt that he did not sufficiently embrace the broader CIO duties. Malcolm Leitch, Chief Operating Officer (COO) will step in as Interim Head of Canadian Investment Management. BGO is looking to make a senior level hire as a replacement. The firm expects the permanent replacement to fill a more conventional CIO role.
We take comfort that BK Prime and BK Plus are not reliant on any key person. Three portfolio managers – Malcolm Leitch, John McFadden, and Kristen Ede – remain on BK Prime. Michel Cormier remains the lead portfolio manager of BK Plus. In addition to the individuals previously mentioned, the BGO organization relies on a large team of real estate investment professionals to support the portfolio managers.
We continue to monitor BGO following the merger of Bentall Kennedy with the global real estate firm GreenOak, which closed in July 2019. The two firms had little overlap in products and geographical presence. However, some modest re-structuring may occur and no special retention mechanisms were put in place. Investment professionals have the ability to purchase equity in the new firm (up to 30%). Bentall Kennedy was largely able to retain talent following their acquisition by Sun Life in 2015. In 2018, the firm experienced high turnover in the Asset Management team, which supports the portfolio managers in all aspects of running direct property investments. These departures appear to be unrelated to each other and unrelated to the GreenOak transaction.
We will continue to monitor the stability of key BGO personnel and the integration of the two entities. We will also be awaiting news about the hiring of a new Head of Canadian Investment Management.
Please contact your Sun Life Group Retirement Services representative.