FWD’s pension business consists of mandatory provident funds (MPF) and occupational retirement schemes ordinances (Orso).
The deal also includes the acquisition of FWD Pension Trust, the firm’s pension trustee entity.
“Expanding our pension business is a key priority for our Asia operations and deepens our wealth business in the region,” said Dean Connor, president and chief executive of Sun Life Financial.
“With the growth expected in the MPF market to meet the needs of Hong Kong’s ageing population, this is an attractive opportunity that fits with our global expertise in the pension market.”
"This partnership provides an excellent opportunity for us to expand our distribution network."
David Wong, chief executive of FWD Hong Kong & Macau, said: “The agreement with Sun Life will enable FWD’s pension customers to access and take advantage of a wider range of investment options in the future, as a part of our comprehensive offerings that also include life and medical insurance, general insurance, employee benefits and financial planning to realise our vision to change the way people feel about insurance.”
Schroders Investment Management
The acquisition of FWD’s MPF business, together with Sun Life HK’s acquisition of the MPF business of Schroder Investment Management (Hong Kong), will strengthen Sun Life HK’s position as a leading MPF provider, the company said.
In May, Schroders and Sun Life formed a strategic relationship that will see the sponsorship of Schroders MPF scheme transferred to Sun Life, with the name of the scheme changed to Sun Life MPF Master Trust.
Schroders will continue as the investment manager of the scheme, with Sun Life serving the scheme’s members.
Sun Life HK’s acquisition of Schroders’ MPF business is expected to be completed in the second half of 2016.
Distribution expansion
The FWD and Schroders acquisitions will add HK$4.6bn (£445m, $593m, €532m) in MPF to the Sun Life HK’s assets under management and bring the firm’s combined AUM to HK$34.7bn.
“This partnership provides an excellent opportunity for us to expand our distribution network. It will further accelerate our already strong growth in the Hong Kong retirement market and follows our new strategic relationship with Schroder Investment Management,” said Kevin Strain, president of Sun Life Financial Asia.
The FWD agreements are expected to be completed in stages over the course of 2017 and 2018, subject to the receipt of regulatory approvals and satisfaction of customary closing conditions.
Financial terms of the transactions were not disclosed.
