Sun Life Financial Inc. (TSX:SLF) announced on Wednesday that its investment management arm has entered into an agreement to acquire New York City-based institutional asset management firm Ryan Labs Inc.

The deal marks the first significant step in building Sun Life Investment Management Inc.’s third party asset management business, which launched in February 2014, as well as its first major push in the U.S. market. Sun Life Investment Management provides private asset class pooled funds and liability driven investment strategies for defined benefit pension plans and other institutional investors.

Ryan Labs, which was founded in 1988 and is known by the brand name Ryan Labs Asset Management, specializes in liability driven investing and total return fixed income strategies for institutional clients. The firm has approximately US$5.1 billion in assets under management for clients across the United States.

“Bringing an established and innovative firm like Ryan Labs into our family is a significant first step in building Sun Life Investment Management’s third-party business in the U.S.,” said Steve Peacher, president of Sun Life Investment Management and chief investment officer at Sun Life Financial. “They have a first-rate track record and share our focus on bringing value for liability driven investors.”

Following the completion of the transaction, Ryan Labs will operate as a unit of Sun Life Investment Management.

“We’ve had a great start in Canada with the launch of Sun Life Investment Management Inc.’s private asset class funds and LDI strategies, and the U.S. acquisition announced today is the next step in our growth,” Peacher said.

Ryan Labs will retain its brand name and will maintain the location of its headquarters at 500 Fifth Avenue in New York City. Its operations will continue to be managed by its current team, headed by president Sean McShea, who will report to Peacher.

“We are pleased to join forces with such a strong, well-respected company as Sun Life who share our commitment to servicing the unique needs of liability-focused and other institutional investors,” McShea said. “It will be business as usual as we continue to deliver for our clients. Moving forward, we will benefit from the resources and support of Sun Life as we continue to develop and grow our business.”

In addition to its third party business, Sun Life Investment Management manages more than $110 billion in assets for the Sun Life Financial group of companies. It has an investment team of more than 200 people.

The transaction is expected to close in the first quarter of 2015, subject to regulatory approval and other closing conditions. The deal is not material to Sun Life’s results, the company said.