$168 bn asset manager announces the firm's strategy is already two-times oversubscribed.
NEW YORK, May 18, 2020 /PRNewswire/ - SLC Management, the $168 billion institutional asset management business of Sun Life Financial, today announced the successful closing of their Term Asset-Backed Securities Loan Facility (TALF) 2020 strategy for institutional investors. SLC Management previously managed a successful TALF strategy in 2009 under the same portfolio management team, which resulted in an annual IRR of 21.5%.*
Investors can finance the purchase of high-quality AAA-rated asset backed securities (ABS) using Federal Government loans for the period during which the TALF program is available, currently between June and September 2020. Sun Life, SLC Management's parent and affiliate, will also be investing in the strategy. This co-investment reinforces an alignment of interests among Sun Life, SLC Management and their clients. The SLC Management TALF 2020 strategy is already two-times oversubscribed.
"In an unprecedented market environment, TALF 2020 provides the opportunity to generate strong returns while investing in AAA-rated securities. We believe this is a compelling risk-adjusted strategy for our clients," said Chris Adair, Head of U.S. Business Development and Client Relationships, SLC Management. "At SLC Management, we've consistently outperformed benchmarks in investment-grade ABS and securitized credit markets. Our portfolio management team successfully managed the TALF program in 2009 and they will apply a similar philosophy and consistent approach to our 2020 strategy. We believe this direct experience will be a critical factor to ensuring its success."
The Federal Reserve's TALF 2020 program is designed to ensure the continued flow of consumer credit during the COVID-19 crisis. The Fed will facilitate this by extending up to $100 billion in non-recourse loans to investors in certain AAA-rated ABS and Commercial Mortgage Backed Securities (CMBS). Investors' success may be determined by several factors including the expert evaluation of credit risk and their ability to participate in the TALF program at the earliest possible date to take advantage of prevailing credit spread dislocations.
Daniel Lucey and Phil Mendonca, co-portfolio managers on SLC Management's Total Return Fixed Income team, will manage the firm's TALF 2020 strategy. Both managers oversaw the TALF 2009 strategy.
"Based on our experience in 2009, we know TALF provides a great opportunity for our clients," said Daniel Lucey, Managing Director and Senior Portfolio Manager, Total Return Fixed Income, SLC Management. "With our long track-record of success and our confidence in the relative value of AAA-rated ABS and CMBS, we're excited to be able to bring this opportunity to institutional investors."
SLC Management also believes the securitized sector of the market currently offers attractive opportunities outside of the TALF program. Under current guidance, TALF eligible assets are restricted to AAA-rated securities. However, outside of the AAA-rated segment, recent volatility has led to significant spread widening in a number of other investment grade securitized sectors. SLC Management has been working with clients and prospects to try to take advantage of these dislocations through opportunistic securitized portfolios.
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 is also part of SLC Management and is a leading, global real estate investment management advisor and a globally-recognized provider of real estate services. As of March 31, 2020, SLC Management has assets under management of C$236 billion (US$168 billion).
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* The TALF 2009 was offered by Ryan Labs Asset Management which is now Sun Life Capital Management (U.S.) LLC, an SLC Management company. Investment-grade ABS and securitized credit markets performance reflects the experience of Ryan Labs Asset Management, which is now Sun Life Capital Management (U.S.) LLC, an SLC Management company.
This document is intended for institutional investors only. The information in this presentation is not intended to provide specific financial, tax, investment, insurance, legal or accounting advice and should not be relied upon and does not constitute a specific offer to buy and/or sell securities, insurance or investment services. Investors should consult with their professional advisors before acting upon any information contained in this presentation.
Sun Life Capital Management (Canada) Inc. is a Canadian registered portfolio manager, investment fund manager, exempt market dealer and in Ontario, a commodity trading manager. Sun Life Capital Management (U.S.) LLC is registered with the U.S. Securities and Exchange Commission as an investment adviser and is also a Commodity Trading Advisor and Commodity Pool Operator registered with the Commodity Futures Trading Commission under the Commodity Exchange Act and Members of the National Futures Association.
The strategy is managed by Sun Life Capital Management (U.S.) LLC, and for Canadian prospects, is distributed by Sun Life Capital Management (Canada) Inc.
Unless otherwise noted, all references to "$" are in U.S. dollars.
Past performance is not a guarantee of future results.
Nothing in this document should (i) be construed to cause any of the operations under SLC Management to be an investment advisory fiduciary under the U.S. Employee Retirement Income Security Act of 1974, as amended, the U.S. Internal Revenue Code of 1986, as amended, or similar law, (ii) be considered individualized investment advice to plan assets based on the particular needs of a plan or (iii) serve as a primary basis for investment decisions with respect to plan assets.
This document may present materials or statements which reflect expectations or forecasts of future events. Such forward-looking statements are speculative in nature and may be subject to risks, uncertainties and assumptions and actual results which could differ significantly from the statements. As such, do not place undue reliance upon such forward-looking statements. All opinions and commentary are subject to change without notice and are provided in good faith without legal responsibility. Unless otherwise stated, all figures and estimates provided have been sourced internally and are current as at the date of the presentation unless separately stated. All data is subject to change.
No part of this material may, without SLC Management's prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the recipient.
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SOURCE SLC Management