UPDATE 1-Manulife to expand private asset management business

Mon Nov 11, 2013 3:02pm EST
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By Euan Rocha

TORONTO Nov 11 (Reuters) - Manulife Financial Corp , Canada's largest life insurer, said on Monday it plans to expand its private asset management business, allowing clients its such as pension funds to invest in timberland, farmland, real estate and private equity assets.

Toronto-based Manulife, which manages money for pension plans, sovereign wealth funds, endowments and midsized insurers, said the expansion will open up a range of new investment opportunities for such clients and institutional investors.

The company has funds under management of some C$575 billion ($549.11 billion), of this, roughly C$265 billion is managed on behalf of such third-party clients.

Kevin Adolphe, who will head Manulife's new private markets asset management segment, said the move comes as institutional clients are allocating more of their money in such assets.

"It has been a challenging five years for institutions, and when you take a look at private market assets, they have offered a good stable source of yield, and relatively lower volatility than a lot of public market assets," he said in an interview.

The insurer has a long history of investing in private placement debt, commercial mortgages, farmland, timberland, real estate and private equity, along with energy and infrastructure assets. But until now it has largely used funds from its own general account to invest outside of public markets.

The firm has C$74 billion of private market investments and only $14 billion of this comes from third party investors.   Continued...