Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF) today announced it
intends to acquire a majority stake in Crescent Capital Group LP
(“Crescent”), a global alternative credit investment manager.
Crescent has approximately US$28 billion in Assets under Management
(approximately C$38 billion), as of June 30, 2020. Headquartered in
Los Angeles with offices in New York, Boston and London, Crescent
has more than 180 partners and employees.
Crescent will form part of SLC Management, Sun Life’s
alternatives asset management business. The acquisition will extend
SLC Management’s solutions in alternative credit, which will
benefit existing and prospective clients.
This transaction provides Crescent the opportunity to bring Sun
Life’s investment capital and SLC Management’s relationships
together with Crescent’s alternative credit expertise and track
record. This will support the expansion of existing and new,
adjacent strategies for the benefit of both firms’ constituencies,
and further enable Crescent to meet the growing needs of its
institutional client base as they allocate more capital to
alternative credit in search of yield.
Sun Life will acquire a 51% interest in Crescent for up to
US$338 million (approximately C$450 million), consisting of an
upfront payment of US$276 million (approximately C$370 million) and
a future payment of up to US$62 million (approximately C$80
million) based on the achievement of certain milestones. As part of
the transaction, Crescent’s equity holders will retain carried
interests in existing funds along with certain assets and their
respective economics. The transaction has a put / call option that
will allow the transfer of remaining interests approximately five
years from closing. Crescent will continue to operate independently
under its current leadership and will retain its distinct brand,
office locations and clients.
Founded in 1991, Crescent is one of the longest tenured credit
managers in the industry and is a leading investor in mezzanine
debt, middle market direct lending in the US and Europe, high-yield
bonds and broadly syndicated loans.
Sun Life has committed to co-invest up to US$750 million
(approximately C$1 billion) in Crescent’s investment strategies,
supporting the launch of new products and creating alignment with
Crescent’s investors.
“We’re excited that Crescent will be joining SLC Management.
Crescent has an excellent track record in alternative credit
investing and an exceptional reputation in the industry,” said
Steve Peacher, President, SLC Management. “SLC Management and
Crescent share a common vision based on delivering outstanding
performance for our investors.”
“This partnership represents the next stage of growth for
Crescent. In getting to know the team at Sun Life and SLC
Management, we feel confident our clients will benefit from the
significant seed capital they are providing, their deep
understanding of the asset management business, and commitment to
Crescent retaining full investment and operational independence of
the firm,” said Mark Attanasio, Co-Founder and Managing Partner of
Crescent Capital Group LP.
“With our longstanding investment track record, we look forward
to further building upon our existing alternative credit investment
capabilities, as well as providing clients with new investment
strategies as the demand for yield grows globally among our roster
of leading institutional investors,” added Jean-Marc Chapus,
Co-Founder and Managing Partner of Crescent Capital Group LP.
Attanasio and Chapus added, “We have spent considerable time
with Dean Connor and Steve Peacher along with their teams. Together
we believe our firms’ complementary cultures will further benefit
our employees, clients, investors, and stakeholders.”
“We’ve been looking to expand our alternative credit
capabilities for some time now, offering our clients a broader,
deeper array of investment solutions across the public and private
credit markets, infrastructure, real estate equity and debt,” added
Peacher.
SLC Management, Sun Life and Crescent are signatories of the
Principles of Responsible Investing (PRI) and committed to
sustainable investing practices.
Moelis & Company LLC and Sullivan & Cromwell LLP acted
as exclusive financial advisor and legal counsel respectively to
Crescent. Skadden, Arps, Slate, Meagher & Flom LLP served as
Sun Life's legal counsel and Berkshire Global Advisors LP served as
their financial advisors.
The transaction is expected to close in late 2020, subject to
receipt of regulatory approvals and satisfaction of customary
closing conditions. Crescent currently serves as the investment
adviser of Crescent Capital BDC, Inc. (“Crescent BDC,” NASDAQ:
CCAP), a business development company. Upon completion of the
transaction, Crescent is expected to become a majority-owned
subsidiary of SLC Management and, subject to the approval of
Crescent BDC’s shareholders, remain the investment adviser of
Crescent BDC.
Slides related to this announcement are available at
www.sunlife.com.
About Sun LifeSun Life is a leading
international financial services organization providing insurance,
wealth and asset management solutions to individual and corporate
Clients. Sun Life has operations in a number of markets worldwide,
including Canada, the United States, the United Kingdom, Ireland,
Hong Kong, the Philippines, Japan, Indonesia, India, China,
Australia, Singapore, Vietnam, Malaysia and Bermuda. As of June 30,
2020, Sun Life had total assets under management of $1,122 billion.
For more information, please visit www.sunlife.com.
Sun Life Financial Inc. trades on the Toronto (TSX), New York
(NYSE) and Philippine (PSE) stock exchanges under the ticker symbol
SLF.
About SLC Management SLC Management is a global
institutional asset manager that offers institutional investors
traditional, alternative, and yield-orientated investment solutions
across public and private fixed income markets, as well as global
real estate equity and debt.
SLC Management is the brand name for the institutional asset
management business of Sun Life Financial Inc. (“Sun Life”) under
which Sun Life Capital Management (U.S.) LLC in the United States,
and Sun Life Capital Management (Canada) Inc. in Canada
operate.
BentallGreenOak and InfraRed Capital Partners (InfraRed) are
also part of SLC Management. BentallGreenOak and is a leading,
global real estate investment management advisor and a
globally-recognized provider of real estate services. InfraRed is
an international investment manager focused on infrastructure,
managing equity capital in multiple private and listed funds,
primarily for institutional investors across the globe.
As of June 30, 2020, SLC Management has assets under management
of C$262 billion (US$193 billion).
About Crescent Capital Group LPCrescent is a
global credit investment manager with approximately US$28 billion
of assets under management. For nearly 30 years, the firm has
focused on below investment grade credit through strategies that
invest in marketable and privately-originated debt securities
including senior bank loans, high yield bonds, as well as private
senior, unitranche, and junior debt securities. Crescent is
headquartered in Los Angeles with offices in New York, Boston, and
London and more than 180 employees globally. For more information
about Crescent, visit www.crescentcap.com. However, the contents of
such website are not and should not be deemed to be incorporated by
reference herein.
About Crescent Capital BDC, Inc.Crescent BDC is
a business development company that seeks to maximize the total
return of its stockholders in the form of current income and
capital appreciation by providing capital solutions to middle
market companies with sound business fundamentals and strong growth
prospects. Crescent BDC utilizes the extensive experience,
origination capabilities and disciplined investment process of
Crescent. Crescent BDC is externally managed by Crescent Cap
Advisors, LLC, a subsidiary of Crescent. Crescent BDC has elected
to be regulated as a business development company under the
Investment Company Act of 1940. For more information about Crescent
BDC, visit www.crescentbdc.com. However, the contents of such
website are not and should not be deemed to be incorporated by
reference herein.
Forward-looking informationIn this news
release, “we”, “our” and “us” refer to Sun Life and its
subsidiaries and joint ventures. Certain statements in this news
release are forward-looking, including, but not limited to,
statements (i) relating to our growth strategies and strategic
objectives, (ii) relating to our anticipated acquisition of a
majority stake in Crescent Capital, (iii) that are not historical
or that are predictive in nature or that depend upon or refer to
future events or conditions, and (iv) that include words such as
“intends to”, “will”, and similar expressions. All such
forward-looking statements are made pursuant to the “safe harbour
provisions” of applicable Canadian securities laws and of the
United States Private Securities Litigation Reform Act of 1995.
The forward-looking statements in this news release represent
our current expectations, estimates and projections regarding
future events as of the time of this news release and are not
historical facts. These forward-looking statements are not a
guarantee of future performance and involve risks and uncertainties
and are based on key factors and assumptions that are difficult to
predict, particularly in light of the ongoing and developing
COVID-19 pandemic and its impact on the global economy and its
uncertain impact on our business, including the assumption that the
transaction will be completed. The forward-looking statements in
this news release do not reflect the potential impact of any
non-recurring or other special items or of any dispositions,
mergers, acquisitions, other business combinations or other
transactions that may be announced or that may occur after the date
of this news release. If any non-recurring or other special item or
any transaction should occur, the financial impact could be complex
and the effect on our operations or results would depend on the
facts particular to such item and we cannot describe the expected
impact in a meaningful way or in the same way we could present
known risks affecting our business. Except as may be required by
Canadian securities laws, we do not undertake any obligation to
update or revise any forward-looking statements contained in this
news release.
Forward-looking statements are presented for the purpose of
assisting investors and others in understanding our expected
financial position and results of operations as at the date of this
news release, as well as our objectives for the transaction,
strategic priorities and business outlook following the
transaction, and in obtaining a better understanding of our
anticipated operating environment following the transaction.
Readers are cautioned that such forward-looking statements may not
be appropriate for other purposes and undue reliance should not be
placed on these forward-looking statements.
The following are transactional risk factors that could have an
adverse effect on the forward-looking statements in this news
release: (1) the ability of the parties to complete the
transaction; (2) failure of the parties to obtain necessary
consents and approvals or to otherwise satisfy the conditions to
the completion of the transaction in a timely manner, or at all;
(3) our ability to realize the financial and strategic benefits of
the transaction; and (4) the impact of the announcement of the
transaction on Sun Life and Crescent Capital. These risks all could
have an impact on Sun Life's business relationships (including with
future and prospective employees, Clients, distributors and
partners) and could have an adverse effect on our current and
future operations, financial conditions and prospects. Other
important risk factors that could cause our actual results to
differ materially from those expressed in or implied by the
forward-looking statements in this news release are listed in the
annual information form of Sun Life Financial Inc. for the year
ended December 31, 2019 under the heading "Risk Factors" and other
regulatory filings of ours filed or furnished to Canadian and U.S.
securities regulators available at www.sedar.com and
www.sec.gov.
Sun Life
Media Relations Contact: |
Sun Life
Investor Relations Contact: |
Rajani Kamath |
Leigh Chalmers |
Associate Vice-President |
Senior Vice-President |
Corporate Communications |
Head of Investor Relations &
Capital Markets |
t. 416-979-6070 |
t. 647-256-8201 |
Rajani.kamath@sunlife.com |
Investor.relations@sunlife.com |
Crescent Capital Media Relations
Contact: |
Crescent BDC Investor Relations: |
Bill Mendel |
Daniel McMahon |
Owner |
Vice-President |
Mendel Communications |
Head of Public Investor
Relations |
t. 212-397-1030 |
t. 212-364-0149 |
bill@mendelcommunications.com |
Daniel.mcmahon@crescentcap.com |
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