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. They are established as segregated funds under the Insurance Companies Act (Canada).

There are two important senior portfolio management updates.

Firstly, effective July 1, 2021, Malcolm Leitch will be stepping down from his full-time role at BentallGreenOak (BGO). Leitch is the Senior Portfolio Manager of the BGO Prime Canadian Property fund (the fund). This fund is also the primary underlying component of BGO Canadian Real Estate Plus. He’ll continue with BGO in a part-time strategic capacity. At this time, he’ll be working with senior leaders on the fund and at the firm. Leitch will stay on the Advisory Board of the fund.  

Secondly, Kristen Ede, co-Portfolio Manager, departed the firm in May 2021. This was due to the firm’s decision to restructure the BGO Prime investment team, which resulted in some personnel departures. 

John McFadden, Managing Partner, will become the Senior Portfolio Manager of the fund. McFadden has been with BGO for 19 years. He has a long history working on the fund with Leitch and the rest of the investment management team. McFadden has 40 years of real estate experience. Simon Holmes joins the team as a Portfolio Manager. BGO expects to hire an associate portfolio manager to further aid the team.  Holmes re-joined BGO in 2016 after spending 10 years with the Canada Pension Plan Investment Board. In addition, he has experience in Canadian and US real estate investments. Holmes has supported BGO’s funds as co-head of the firm’s transactions team.   

BGO has indicated that the restructuring will result in more dedicated resources on the fund. A ten member asset management team, responsible for property-level decisions, will have increased focus on the fund. The fund will have five dedicated members in Eastern Canada. In addition, five members in Western Canada will spend 50% of their time on the fund. Prior to this, these members of the asset management team worked on both the fund and separate accounts.  The firm will delegate more decision-making to the asset management teams. The firm believes that this will make them more responsive to opportunities and changes in the real estate markets. With this re-structuring, BGO felt that Kristen Ede’s co-portfolio management role was redundant.  

In addition to the portfolio management and asset management teams, the fund is further supported by well-resourced teams that focus on transactions, property development, research and valuations.

BGO has also added experienced leadership in recent years. Paul Mouchakkaa, Head of Canada, joined the firm in 2020 from the California Public Employees Retirement System’s real assets team.  Christina Iacoucci, Chief Investment Officer, has 30 years of real estate experience. She joined BGO from Sun Life’s real estate team, following Sun Life’s acquisition of Bentall in 2015.    

Our view

We met with BGO to better understand the new team structure, the departure of Kristen Ede and how Malcolm Leitch will continue to contribute in his reduced role.

We view Malcolm Leitch as a key contributor to the fund. This is due to the 2020 departures of Paul Zemla, Head of Canadian Investment Management (CIO), and Michel Cormier, Managing Director, Portfolio Management. Leitch joined BGO (then known as Penreal Advisors) in 1987. He played a significant role in the growth of the firm over the past 30+ years. His departure from the day-to-day operations isn’t surprising given his tenure.

We also view Kristen Ede’s departure as a significant loss.  Ede had 28 years of real estate experience. In addition, she was a member of the fund’s portfolio management team since joining the firm in 2017. We viewed her as a source of continuity and future leadership with an eye towards future retirements.  Her departure is significant after the recent departure of Cormier. BGO indicated that the firm developed Cormier as a future leader. As a result, his decision to join another real estate organization was a disappointing loss. 

BGO acknowledged the significant changes that took place. However, they expressed confidence that this restructuring provides the team structure they need to embark on a long period of stability. The firm expects the next two to four years to be a transitional period under McFadden’s leadership. BGO believe Holmes will be the next generation of leadership when McFadden decides to retire.  

We take comfort in McFadden’s leadership, experience and continuity.  We also take comfort in the firm’s well-resourced teams and leadership under Mouchakkaa and Iacoucci. However, the fund’s investment team has now experienced a series of significant changes since the merger with GreenOak two years ago. As a result, McFadden is now the only long-tenured manager.  There is now a risk of employee-initiated turnover. This is due to the significant organization change. Key person risk is now also apparent with fewer long-tenured decision makers for the fund. It is unclear what the succession plan is should any more turnover occur.  We also question the firm’s overall approach to talent management, particularly among the tenured and senior staff.  The firm largely initiated the recent turnover after deeming certain roles redundant. However, the departures of experienced talent is a loss for the overall depth on the team.  

The lead portfolio manager for the BGO Canadian Real Estate Plus fund, available on our DC platform, continues to be Shishir Nigam. He replaced Cormier in 2020.

Sun Life’s GRS Investment Solutions team first designated the BGO Prime Canadian Property and BGO Canadian Real Estate Plus funds as On Watch in Q1 2020. This was due to employee turnover and the merger with GreenOak. Leitch’s reduced role and Ede’s departure add to our concerns, so the funds continue to stay On Watch. We will continue to monitor the firm as it transitions to its new structure and the next generation of leadership.


Please contact your Sun Life Group Retirement Services representative.