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 under the Insurance Companies Act (Canada).

In fall of 2022, TD Asset Management (TDAM) announced changes to their Fixed Income investment teams. The changes include a restructuring of reporting lines for some functions and leadership changes. 

There were two major changes to the Fixed Income team:

  • A 19-person Research & Analytics team will report to Chief Investment Officer (CIO) David Sykes; and  
  • A 7-person Private Debt team will report into the Alternative Investments division.

As a result of these changes the headcount within the Fixed Income team declined from 74 to 48 people. As a direct consequence of the restructuring, TDAM decided to part ways with Robert Pemberton, Head of Fixed Income.  Michael Augustine, Head of the Asset/Liability Management (ALM) teams, is the new Head of Fixed Income. 

Pemberton joined TDAM in 2000 and had been the Head of Fixed Income since 2014. He also had been lead Portfolio Manager (PM) for the TDAM Canadian Core Plus and TDAM Active Canadian Corporate Funds (“the funds”) for many years.  As lead PM, Pemberton oversaw the two strategies, but wasn’t involved in their day-to-day management.  Scott Colbourne, Managing Director of Global Active Fixed Income, is the new lead PM for the funds. Benjamin Chim will continue to work along side Colbourne as a co-PM.  Colbourne and Chim had already been performing the day-to-day portfolio management on the funds.

Sun Life GRS Investment Solutions’ view

Overall, we are comfortable with the structural and leadership changes to the Fixed Income team. TDAM’s goal was to streamline the reporting structures and to facilitate more use of the Research & Analytics team by other divisions.  The reduced headcount within Fixed Income created extra capacity to absorb the loss of Robert Pemberton. Pemberton’s departure is a notable loss, as he brought experience and leadership to TDAM’s Fixed Income team. His replacement, Michael Augustine, has led the ALM team since joining TDAM in 2012. Augustine’s background includes trading, portfolio management, and actuarial work at major Canadian insurance companies. TDAM believes Augustine is well-suited to lead the Fixed Income team going forward.

As Head of Fixed Income, Pemberton had overall responsibility for TDAM’s entire global fixed income investment platform. As a result, Pemberton’s role on active fixed income strategies was more limited than a traditional lead PM. His departure provides Scott Colbourne and Ben Chim the opportunity to take on full portfolio management responsibilities for these strategies.  We met with TDAM and Scott Colbourne to discuss the change. Colbourne emphasized that the strategies are managed collaboratively as a team.  Colbourne and Chim joined the global active fixed income team in 2017 and 2018, respectively. Chim began to focus on global high yield in 2021.

We take comfort that there is continuity in the management of the funds. Due to the change to the PM team and the loss of Pemberton’s experience, we have placed the funds on our Watch List under Additional Monitoring, the least severe category. We will continue to monitor the funds and provide updates if needed.

Do you have to take any action? 

You and your members don’t have to take any action as a result of these changes. 

Questions?

Please contact your Sun Life Group Retirement Services representative.