Sun Life Financial Services of Canada Inc. announced Friday it has increased its ownership stake in CI Fund Management Inc. by issuing 2,142,156 common shares in exchange for 5,462,500 common shares of CI. That’s approximately 2.3% of the total outstanding common shares of CI.

As a result of this transaction between Sun Life and private common shareholders of CI, Sun Life will own 79,500,627 common shares of CI, representing 34% of the fund management firm’s outstanding common shares.

The exchange ratio of 2.55 CI common shares for each common share of Sun Life represents a premium of 5.9% over the 20 consecutive trading day average for CI common shares immediately preceding February 20, the date on which an offer from Sun Life was made to a small number of CI’s private common shareholders.

Last July 25, Sun Life acquired a 30% interest in CI in exchange for its mutual fund subsidiaries, Spectrum Investment Management Ltd. and Clarica Diversico Ltd. and related segregated fund businesses.

The transaction included a strategic distribution agreement giving CI preferred access for its products to more than 4,000 Clarica agents and managers.

“Increasing our ownership stake in CI will allow us to more fully participate in the future growth of the company, furthering our strategic objective of achieving leadership positions in key target markets in North America,” said Donald Stewart, CEO, Sun Life Financial. “Since the closing of our original transaction, integration of the Spectrum and Diversico systems into the CI systems has been completed and we have gained the ability to offer our customers enhanced product choice through Canada’s largest direct sales force.”

The original transaction between Sun Life and CI included a standstill agreement under which Sun Life agreed not to increase its stake in CI beyond 34% for three years, subject to certain exceptions.