Sun Life Financial has launched a major foray into the infrastructure sector for the first time, agreeing to buy a majority stake in InfraRed Capital Partners and planning to seed its own infrastructure funds.
The Canadian life insurer has agreed to pay GBP 300m for an 80% stake in London-headquartered InfraRed in a cash only transaction, both companies said on Wednesday (18 December). InfraRed’s 23 partners will keep running the business day to day.
Sun Life until now did not have a dedicated infrastructure equity business, although for over 15 years it has been a major lender to the sector both in Europe and North America.
SLC Management, the insurer’s alternatives asset management business within which InfraRed will be subsumed, currently has strategies for fixed income and real estate – the InfraRed deal marks the start of its third strategy.
InfraRed’s CEO, Werner von Guionneau, will report directly to Steve Peacher, president of SLC Management, which as of 30 September had assets under management of CAD 227bn (GBP 132bn).
The insurer, which is keen to get its hands on the long-term management fees received by InfraRed, now also plans to provide USD 400m of seed capital to support the launch of new funds – including a new North American renewable infrastructure fund – managed by InfraRed.