Toronto-based Sun Life Financial Inc. announced on Wednesday that its Hong Kong operation will acquire the pension business of FWD Life Insurance Co. (Bermuda) Ltd., also in Hong Kong.
The deal includes the acquisition of FWD’s “mandatory provident fund” (MPF) business, which is related to Hong Kong’s legislated retirement fund system for workers.
The two companies will also enter into an exclusive 15-year distribution agreement that will allow Sun Life Hong Kong Ltd. to distribute its pension products through FWD’s agency force in Hong Kong, according to the announcement.
This is the most recent acquisition for the Canadian life insurance company, which has been on a whirlwind-buying spree in Asia. Recent purchases include the MPF business of Schroder Investment Management (Hong Kong) Ltd., an arm of London, U.K.-based Schroders PLC. The arrangement between Sun Life and Schroder was announced in May and is expected to be completed in the second half of 2016.
The acquisition of the two MPF businesses will add $769 million in MPF assets under management (AUM) to Sun Life Hong Kong and bring the company’s combined AUM to $5.8 billion.
“This partnership provides an excellent opportunity for us to expand our distribution network,” says Kevin Strain, president of Sun Life Financial Asia, in a statement. “It will further accelerate our already strong growth in the Hong Kong retirement market and follows our new strategic relationship with Schroder Investment Management.”
Sun Life’s transactions announced on Wednesday are expected to be completed in stages throughout 2017 and 2018 and are subject to the receipt of regulatory approvals and customary closing conditions. The financial terms were not disclosed.
“Expanding our pension business is a key priority for our Asia operations and deepens our wealth business in the region,” says Dean Connor, president and CEO of Sun Life, in a statement. “With the growth expected in the MPF market to meet the needs of Hong Kong’s ageing population, this is an attractive opportunity that fits with our global expertise in the pension market.”
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