Excel Funds Management Inc., which has specialized in emerging markets since launching its first mutual fund, the flagship Excel India, in 1998, has agreed to become part of Sun Life Global Investments Inc.
In a joint release today with the Excel organization, Sun Life Global announced it has struck a deal to acquire management firm Excel Funds and its investment arm Excel Investment Counsel Inc., which will add an estimated $700 million to its current $18 billion in assets under management.
Bhim Asdhir, Mississauga, Ont.-based Excel's president, CEO, founder and principal owner, will join Sun Life Global's leadership team on completion of the transaction, which is scheduled to close by the end of 2017. Terms of the acquisition will not be disclosed, the parties said. Asdhir will become a member of the integration planning committee and continue as the senior relationship manager for the Excel funds' sub-advisors and brokers.
By acquiring Excel, Sun Life Global hopes to accelerate its growth through the addition of emerging-markets offerings. As well, Sun Life will gain a beachhead in exchange-traded funds through assuming sponsorship of the two Excel ETFs which were launched in May. The acquisition is also consistent with the broader strategy of parent Sun Life Financial Inc. (SLF) to expand its wealth-management business in Canada.
The corporate connections between Sun Life and Excel precede today's acquisition announcement. Excel's most important portfolio sub-advisor is Mumbai-based Birla Sun Life AMC Ltd., a joint venture of Sun Life Financial and Aditya Birla Sun Life Asset Management Co. Pte. Ltd. Close to half of Excel's assets are in the $317-million Excel India, which is among Birla Sun Life's responsibilities for Excel Funds.
"Acquiring Excel Funds is a great fit for us, bringing a complementary product line-up that uses a sub-advisor business model similar to our own," Rick Headrick, president of Sun Life Global Investments, said in a release after the market close.
For his part, Asdhir was quoted in the release as saying that the acquisition is a "natural evolution for Excel Funds, which will now be part of a much larger global fund family." Neither Headrick not Asdhir were available for comment on the day of the announcement, a Sun Life spokesperson told Morningstar.
The pending acquisition is yet another example of consolidation in the fund industry, with independent Canadian firms selling out to much larger players that enjoy greater economies of scale and have greater financial resources to draw on to compete effectively.