By Euan Rocha
TORONTO Nov 11 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.
Adolphe said the vast majority of the $14 billion is now in
its Hancock Natural Resource Group, which invests in timberland,
farmland and renewable energy projects.
"What we're going to be doing is expanding the offering for
institutional clients," he said, adding that the firm plans to
allow clients to put money into commercial real estate lending,
commercial mortgage lending and private placements.
BET ON BLACKBERRY
BlackBerry Ltd last week disclosed that
Manulife was among the firms investing in its $1 billion
convertible notes offering. The embattled smartphone maker
stunned many investors when it abandoned plans to sell itself,
named a new interim chief executive and outlined its debt
In a regulatory filing, Waterloo, Ontario-based Manulife
said four funds are investing a total of $70 million in the
notes offering after two initial investors, Brookfield Asset
Management Inc and Markel Corp opted to pare
the size of their initial investments.
Adolphe declined to comment on the BlackBerry investment.
Manulife has spent the last few years working to reduce its
exposure to financial market volatility after falling stock
prices and bond yields led to massive quarterly losses following
the 2008 financial crisis.
Last week, Manulife reported a quarterly profit that topped
analysts' expectations, driven by strong wealth and mutual fund
sales and higher bond yields.
The company, which traces its roots back more than 125
years, was once headed by Canada's first prime minister, Sir
John Macdonald. Besides its Canadian operations, Manulife owns
U.S. insurer John Hancock and it is also growing in Asia, where
it is present in about a dozen countries.