Manulife Financial headquarters in Toronto, August 29, 2012.Galit Rodan/The Globe and Mail
Manulife Financial Corp.'s funds under management reached a new high of $575-billion according to the insurer's latest earnings, reported on Thursday. But although general and segregated funds make up the bulk of those assets, the company has been quietly building up its institutional portfolio.
Institutional advisory accounts now make up $30.7-billion of the pool of fund, up from $23.7-billion at this time last year.
The company is particularly pleased with the growth of its private asset management business, said Steve Roder, the company's chief financial officer. "This is pure, third-party institutional fund management. We have attracted some significant mandates from institutions, including Asian sovereign wealth funds," he said in an interview. These mandates have increased over the past year.
Many institutional investors are looking for ways to invest assets such as infrastructure and real estate in a search for yield. But picking the right projects is important, and Manulife said it is benefiting from its experience and scale in some of these alternative investment classes.
"We've been making some real progress in offering fund management to institutions, including sovereign wealth funds, particularly those who are looking for expertise in asset classes they may not have," Mr. Roder said. That would include assets like timberland, which made up $1.6-billion of the invested assets in the company's portfolio, and farmland, which made up about $950-million. Oil and gas investments have also performed well.
Manulife's broader investments gains were recorded at $543-million in its third quarter, with $284-million of that coming from gains on alternative investments, credit experience and the reallocation of money out of low-yielding government bonds into more attractive assets.
Editor's Note: Steve Roder's title has been corrected in the online version of this story.