Sun Life Financial on Jan. 5 said it completed the acquisition of a 51% stake in global alternative credit investment manager, Crescent Capital Group. Shares of the financial services company rose 1.2% at the close on Tuesday.
Crescent will form part of Sun Life Financial’s (SLF) alternatives asset management business, SLC Management. The acquisition will extend SLC Management’s solutions in alternative credit.
As part of the transaction, Crescent’s equity holders will retain carried interests in existing funds along with certain assets. The deal also includes a put and call option that will enable the transfer of remaining interests by the end of 2026.
Crescent will continue to operate under its current leadership. It will retain its individual brand, office locations and clients. The company will continue to serve as the investment adviser of business development company, Crescent Capital BDC (CCAP).
Back in November, Sun life Financial’s subsidiary, Sun Life Vietnam entered into a 15-year exclusive bancassurance partnership with Asia Commercial Joint Stock Bank (ACB). The partnership will allow Sun Life Vietnam to leverage ACB’s wide-ranging distribution network of 371 branches. SLF is expected to pay $370 million upfront, and variable payments upon the success of the partnership. (See SLF stock analysis on TipRanks)
In reaction to the company’s bancassurance partnership with ACB in Vietnam, Canaccord analyst Scott Chan raised the stock’s price target to $47.78, but reiterated a Hold rating.
“This partnership supports SLF’s strategic initiatives of becoming a leader in Asia through penetration in high-growth markets,” Chan wrote in a note to investors. “This transaction is expected to reduce SLF’s LICAT ratio by ~2%.” LICAT measures the capital adequacy of an insurer.
From the rest of the Street, the stock scores a cautiously optimistic analyst consensus of a Moderate Buy based on 4 Buys and 3 Holds. The average analyst price target of $49.45 implies upside potential of 10.5% to current levels.
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