Addition of the RBC Canadian Core Real Estate Segregated Fund to the Sun Life DB Investment Platform

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 funds listed below, which are established as segregated funds in accordance with the Insurance Companies Act (Canada).

Plan sponsors don’t need to take any immediate action as a result of this update. You may wish to consider whether the new fund would be a suitable addition to your Defined Benefit (DB) plan, or within specialty custom portfolios in Capital Accumulation plans.

We’re pleased to announce the addition of RBC Canadian Core Real Estate Segregated Fund (“the Fund”) to our DB investment platform¹. The manager of the Fund is RBC Global Asset Management (“RBC GAM”).

The fund is the now second direct Canadian real estate strategy available on the Sun Life DB investment platform. Direct real estate, like other real assets, provide diversification versus traditional asset classes. Compared to traditional asset classes, Canadian real estate offers stable long-term cash flow generation, long-term growth potential and increased inflation sensitivity. Direct real estate provides better diversification than listed real estate (i.e. publicly traded Real Estate Investment Trusts), as it isn’t subject to equity market movements.

About the RBC Canadian Core Real Estate Segregated Fund

The Fund aims to provide returns comprised of income and capital appreciation through an investment in a diversified portfolio of high-quality core income producing real properties located in major Canadian markets. The Fund targets a return objective of 6-8%, net of fees.

The Fund is a fully diversified, institutional-quality portfolio, with a focus on Canada’s six major markets (Vancouver, Edmonton, Calgary, Toronto, Ottawa, Montreal). The Fund may also invest in secondary markets in Canada that are located outside of the major markets.

The Fund is managed by RBC GAM’s Private Markets Real Estate Investment team. The primary decision makers are:

• Michael Kitt, Managing Director, Head, Private Markets
• Jennifer Schillaci, Managing Director, Head, Real Estate & Mortgage Investments
• Jimmy Buzaglo, Portfolio Manager, Real Estate Equity Investments
• Adnan Ahmad, Associate Portfolio Manager, Real Estate Equity Investments

RBC GAM’s Private Markets Real Estate Investment team believes that an allocation to a core strategy (core assets in core markets with core tenants) should form the foundation of investment exposure to Canadian real estate within a portfolio.

RBC GAM partners with British Columbia Investment Management Corporation (BCI) and its subsidiary QuadReal in a co-ownership structure to manage the Fund in Canada. 

• BCI is one of Canada’s largest public pension plan managers that manages over $250B in AUM across a portfolio of diversified public and private market investments on behalf of 29 British Columbia public sector clients.
• QuadReal was established in 2016 as a wholly owned subsidiary of BCI. QuadReal acts as the investment real estate arm of BCI, who manage over $35B in direct real estate investments.

RBC GAM complements QuadReal’s real estate services with its own investment management resources, economic research groups, and substantial global relationships, adding an additional level of governance.

RBC GAM describes the Fund’s investment philosophy as being guided by the following principles:

1. To maintain a strong, fully aligned partnership with BCI and QuadReal.
2. To provide a core real estate investment solution that is comprised of high-quality assets in major urban locations and inclusive of a conservative capital structure.

Permissible Investments include:

• Direct and/or indirect interest in real estate.
• The Fund may also hold cash and cash equivalents, other money market instruments or money market funds in order to meet its current obligations.
• Investment in mortgages or other long-term fixed income investments are not permitted.

Asset Mix restrictions are below:

The benchmark of the fund is the MSCI/RealPAC Canada Annual Property Index (reported with a one-month lag).

The Fund reported $4.4B in assets under management as of June 30, 2025. The Fund’s inception was in October 2019.

The Fund is valued daily but traded quarterly. As the Fund invests in illiquid assets, it has special processes for subscriptions or redemptions.

1. There is a minimum investment of CAD$200 thousand. This includes the initial investment, while there are no minimums for subsequent investments.
2. The Fund has a quarterly subscriptions and redemptions schedule with trades occurring January, April, July and October month ends. RBC requires Sun Life to provide:
   
   • Notices of subscription by the month-end prior to the trade date. i.e. January 31 subscriptions must be requested by December 31.
   • Notices of redemption two months prior to the trade date, i.e. January 31 redemptions must be requested by November 30.
     
     Given the requirements above, Sun Life requests that Clients provide the subscription and redemption notices at least 40 and 70 days prior to the subscription and redemptions dates, respectively. Due to changes in Client demand and investment opportunities, the Fund may become oversubscribed. When oversubscribed, subscriptions will take the form of commitments that are placed in a queue and are drawn down in subsequent trade dates by commitment date. This is similar to other direct real assets funds on the platform.
      
3. Plan sponsors who wish to invest in the Fund must sign a separate Client Disclosure Letter, similar to other similar funds on our platform.

About RBC GAM

RBC GAM is the asset management division of Royal Bank of Canada (RBC) that has responsibility for managing discretionary assets. The firm includes the separate but affiliated subsidiary, RBC Global Asset Management Inc. (including PH&N Institutional).

RBC purchased Phillips, Hager & North Investment Management Ltd. (PH&N) on May 1, 2008. PH&N are an investment manager currently on Sun Life’s Core Investment Platform, so RBC GAM are not considered a new investment manager to the platform.

As of June 30, 2025, the RBC GAM group of companies manages more than C$720 billion.