Steve Peacher was just early enough in his search for acquisitions to sidestep at least some of the frenzied competition in today’s market for alternative investment managers.
“There are so many more buyers and fewer sellers as a lot of firms have chosen a partner,” said Peacher, president of SLC Management, adding that “big, credible” buyers like T. Rowe Price, which bought Oak Hill Advisors, weren’t out competing with SLC even just a few years ago. If the firm started now, “It would have been much harder for us to develop the platform,” he said. But so far it has worked. SLC is the $274 billion institutional asset management arm of Canadian insurer Sun Life.
Peacher pitched the board of Sun Life on building a third-party asset management business that focused on alternatives a decade ago. The company, like many insurers, already had an asset manager to invest the money on its balance sheet and had a long history in alternatives. In 2015, Peacher spearheaded then Sun Life Investment Management’s purchase of three managers to break into the U.S., including Ryan Labs, a fixed-income boutique, and real estate firm Bentall Kennedy, which merged with GreenOak in 2019 to form BentallGreenOak. It later bought InfraRed Capital Partners, an infrastructure manager, and alternative credit firm Crescent Capital.
Peacher said SLC is done with the big acquisitions — it has a broad enough platform to support things like strategic partnerships with pensions and other institutions and new distribution channels, such as one for ultra-high-net-worth investors. But Peacher said he’s out in the market looking for smaller managers that he thinks will be easy to integrate now.
“Some nichey acquisitions that wouldn’t have been as meaningful before are now nice add-ons to platforms that we’ve got,” Peacher said. SLC has looked at boutiques that focus on asset-backed lending and that could be integrated with Crescent and private equity secondaries, which could build on SLC’s lending relationships with North American PE firms.
Peacher said having enough scale to be successful in asset management doesn’t necessarily mean having absolutely every asset class. For SLC, he remains focused on what made SLC stand out in the first place: investing its own money — and taking the same risks — alongside outside investors.
SLC committed US$600 million in seed capital to BentallGreenOak, for example, along with US$400 million to InfraRed and US$750 million to Crescent. (It initially committed C$600 million in 2014 to start SLC Management in Canada.)
The money seeded a number of products, including an InfraRed fund focused on sustainable infrastructure in the U.S. The manager also seeded CLO equity to help Crescent raise over $1 billion in its Atlas franchise, and committed $200 million to the firm’s latest mezzanine and direct lending funds, its next European specialty lending fund, and the Crescent Business Development Corporation. Peacher said he’s open to being creative in using the seed money, whether it’s for warehousing deals before a fund is launched or providing bridge financing.
While seemingly mundane, Peacher said he’s looking forward to the next step: Sun Life breaking out the performance of SLC in its financials so investors can see the same level of detail they would get with an Apollo or Blackstone. Shareholders will get a look at what Sun Life’s $1.6 billion bought them.
