Jackie Gallant: Hi everyone. Welcome to Three and five an SLC Management Podcast. I'm Jackie Gallant, Senior Managing Director and Head of Marketing and Communications for SLC Management. We are turning the tables today. In recognition of an upcoming milestone, I will be conversing with Steve Peacher, President of SLC Management, who typically hosts this podcast with those in the know asking three relevant questions. Steve, today marks the ten year anniversary of SLC management. When you think about when the firm started in 2013 and the launch of the private asset class funds in Canada shortly thereafter in 2014, did you ever believe the firm would reach almost $400 billion and assets under management by 2023? Can you reflect upon that growth?
Steve Peacher: Well Jackie, I have to say I'm a little nervous about being on the receiving end of these questions as opposed to the one who answers the question. And first, I want to say actually, thanks to you, you've been at SLC management pretty much since the beginning. You've played a huge role in getting us to where we are and we're lucky to have great people like you within SLC and within our affiliate managers, so I'll start with that. You know, I received board approval in May of 2013 to pursue this. And when I did, I was exhilarated, but I was also daunted I suppose. I had a lot of confidence that our ideas were right and that our strategy was good. But frankly, I wasn't exactly sure how we were going to get there. So it felt a little bit like casting off on an exciting journey. We didn't have a precise roadmap and there was no turning back, you know. That's how I felt at the time. And as you know, today, we've we manage almost $400 million, those are in Canadian dollars. We manage money and currencies around the world. Of that, about $220 million CAD is for over 1,000 investors around the world. The remainder is for Sun Life’s balance sheet. And I think when I reflect back, I think there are a few factors which explain how we've been able to develop this. I mean, the first is that we had some strong investment capabilities inside of Sun Life, such as our position in investment grade private credit, and those capabilities combined with the outstanding reputation that Sun Life has in Canada, really allowed us to get off the ground initially by raising capital from pension funds in Canada, and that's really what got us going. So that was thing one. I think secondly, we were able to find some outstanding asset managers, alternative partner with starting with Ryan Labs and Prime Advisors on the fixed income side, and then Bentall Kennedy and then GreenOak that merged with Bentall Kennedy and then Crescent Capital and InfraRed and Advisors Asset Management. I don't think that we would be able to find partners of this quality if we were starting out today because so many of the good, good managers like that have partnered with other firms. I think the third factor was just support from Sun Life. I mean, I don't think many old-line traditional insurance companies like Sun Life could have found a way to partner with private equity style alternative managers. But Sun Life was very open minded, incredibly supportive, and was willing to do what it took to get those transactions done. And it's also been a huge advantage that we've been able to channel over $2 billion of seed capital from Sun Life’s balance sheet to SLC strategies. That's been a real win-win for both Sun Life and the managers that we've partnered with. And forth, as I mentioned, we have outstanding people. I think in this business it is all about the quality and commitment of your employees. And we're really lucky to have great employees who are committed to the clients who do this business.
Jackie Gallant: That's great. And Steve, you mentioned that, yes, I've been with SLC Management from the start, so I have been a witness to the growth trajectory, which has been fantastic. This is this next question's a tough one. In the last ten years, there have been many memorable moments. What are your top three?
Steve Peacher: Well, to some extent, the last ten years has been a bit of a blur to me. But three things that, I there are more than three, but three things I'll mention that stand out. The first was, and I mentioned the board meeting in May of 2013 when I first pitched this idea to the Sun Life Board. And I assumed on that day that we were having our board meeting in our headquarters in Toronto as we usually did, but I must have been asleep at the switch and I showed up at the headquarters for my presentation, and I realized that the meeting was going to be held at the Royal York Hotel, which was, you know, a few blocks away. So it was a hot day. And I basically sprinted the seven or eight blocks over the Royal York, and I went right into the meeting and and let's just say I was glowing profusely when I sat down. And I have no idea what the board was thinking at that point. But, you know, they couldn't have been more supportive. Maybe they felt sorry for me. So, that was that was one memory at the very beginning that will always stick in my mind. The second was probably not one day, but a period when we started, and you'll remember this, when we started to get some of our first big wins in Canada, and I won't name the name of those clients, but that was when it really hit me that we could be a legitimate institutional player and that we just might pull this off. I think it was the first time where I thought this went from an idea into a tangible reality, and that was, that feeling was very exciting for me for that reason. And then the third memory that's really etched in my brain is the night we inked a deal to buy a majority interest in GreenOak and merge them with Bentall Kennedy as part of one big transaction. That was an extraordinarily complex deal. One of the lawyers at a major law firm we were working with told me it was the most complicated deal he had worked on and he'd been doing these kind of deals for decades. It took us about a year and a half to negotiate it, and we got down to late December in 2018. A number of us were in the headquarters office in Toronto at about two in the morning. We had to get the deal basically done that day because we were running into the holidays. I was on the phone with Sonny Kalsi and John Carrafiell, who were the course the founders at BGO, and we were haggling over some point that I can't even remember. And I finally paused and said, Guys, this needs to stop with let's do this. And they agreed. And that was that was that was became a real milestone for SLC. But I remember that very distinctly, at two in the morning after a year and a half negotiation.
Jackie Gallant: And a perfect time of the year as well.
Steve Peacher: So those are three things that that stand out to me. But there are many other great memories along the way as well.
Jackie Gallant: I remember the first couple of deals or RFPs that we were working on in that first year, and it was all hands on deck. So whoever it was, whoever was part of the firm at the time, was involved in writing answers to the RFP. Whereas you fast forward to today and we have teams that are dedicated to that process. So a lot has happened in ten years. So what's next? What's next for SLC Management?
Steve Peacher: In my view, and you know, of course I'm biased about this, but I think that we've assembled a fantastic set of global investment capabilities in public and private credit, in real estate debt and equity, in infrastructure. And despite the ups and downs in the market, the demand for those asset classes is continuing to grow. We've got the financial backing of a highly respected, financially strong parent in Sun Life that has a lot of experience owning asset managers. I mean, Sun Life has had a great success owning in MFS since 1982. And I think that the opportunity that we have now is to make the most of what we've put together over the last ten years for the benefit of our clients. You know, I have two particularly bigger is a focus that are for me right now. One is around the acquisitions themselves. You know, when we made, when we invested in these firms we generally did it in it with a structure where we we bought a majority interest out of the gate and then we have a back end to the deal with BGO, with Crescent, with InfraRed, with AAM, and those are coming up in the next few years. And we are spending a lot of time right now with the leadership of those firms to make sure that everything is in place from both the leadership standpoint, from an incentive standpoint, to make sure that we don't miss a beat when we get to the back end of those deals. And that's on the minds of our of the employees of those companies that's on the minds of our clients. And our plan is to be well out in front of that because we don't plan to miss any beat when that happens. And the second big focus right now is on the high-net-worth channel. You know, I think this is the next frontier for alternatives. You're already starting to see high net worth investors, ultra-high net worth investors increase their allocations to alternatives like real estate, like infrastructure, like private credit, just like institutional investors started to do over 20 years ago. I think this is a megatrend and given the capabilities we have we're going to be part of it. That's why we acquired the majority interest in AAM, which was a distribution platform in the United States that allows us to get into the offices of financial advisors across the country. And and it's why we just announced the partnership with Scotiabank in Canada, which will allow us to access that same client base in Canada. So we're going to be able to tackle that market across North America. And I couldn't be more excited about that prospect, but I guess I would say Jackie, you've got more than anything else I have a firm belief that the best investment managers focus on their client first and the growth of the firm's second. And I believe this is a business where if you do a great job investing for your clients, your business results will take care of themselves. And so above all, our main focus is just going to continue like we are today, to do the best job we can for our clients.
Jackie Gallant: That's great. Steve, you've structured this podcast as three questions in five minutes, but you have a history of throwing in a bonus question at the end. I don't want to break that tradition. So here goes. Ten years is a long time professionally and personally. Can you share any personal milestones over the last ten years?
Steve Peacher: Well, I, ten years is a long time for anybody. So everybody's got a lot of things that happened in your life over ten years. It's certainly on the on the business side, as you and I and others have been have been building SLC, has been very busy, maybe even crazy at times. On the personal side, for me, it's been very busy as well. If I think back or last ten years, each of my three children graduated from college, after which all in the military, two were deployed in different parts of the world. Two of my kids got married and last summer I had my first grandchild. So, you know, and if my kids are listening to this, hopefully that's the first of many more. So I'll put that out that note. So it's needless to say, it's been a really full schedule both at work and at home. I will say this last ten years have been both personally, professionally, some of the greatest in my life. So it's been wonderful.
Jackie Gallant: That's amazing. Thank you, Steve, for a great conversation and happy anniversary to SLC management.
Steve Peacher: Thank you.
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