Montreal-based Fiera Capital Corp. is acquiring Toronto-based Foresters Life Insurance Co.’s asset management business in an effort to beef up its offering for institutional clients, Fiera president and COO Jean-Philippe Lemay says.
Fiera will buy Foresters Asset Management, the investment management subsidiary of Foresters that’s focused on institutional and insurance liability-driven investment (LDI). Terms of the deal, which is expected to close in the third quarter, were not disclosed.
Foresters Asset Management had $10.5 billion in assets under management (AUM) as of April 30.
“That positions us to about $25 billion in the LDI segment, the institutional space in Canada, which is putting us in a very strong leadership position,” Lemay said in an interview.
The LDI segment is becoming a larger focus as institutional clients look to manage liabilities and achieve their funding objectives, he said, which requires a high level of expertise.
Fiera will become the manager of Foresters Asset Management’s six Imaxx mutual funds, which offer a mix of Canadian and global bond, dividend and equity growth funds.
Foresters’ fixed income team will go to Fiera, Lemay said, and the firm is in discussions with the equity team.
The purchase follows a series of recent acquisitions to bolster Fiera’s private alternatives business, including Toronto-based Integrated Asset Management, Hong Kong-based Clearwater Capital Partners, and London, U.K.-based Palmer Capital Partners.
The $10.5 billion in new assets from Foresters is mostly in public fixed income, Lemay said, “but all the insurance clients underneath are looking to expand in the multi-asset space and [are] increasing their allocation to private alternative strategies.”
Fiera’s previous acquisitions will help to build relationships with the new clients from Foresters, he said.
Looking ahead, Lemay said the firm will continue to “globalize our offering” on private alternatives.
“We’re probably going to continue to look at some niche firms to be able to expand on that and round up our offering on that side,” he said.
Foresters said the sale is aligned with its strategy to focus on its core life insurance business. In April 2019, the firm announced the sale of its U.S. asset management business to Macquarie Investment Management.