Great-West Lifeco is taking a bigger run at the retirement market south of the border.
The Winnipeg-based company's U.S. operating division, Great-West Financial, is merging its retirement business with that of Putnam Investments.
"We see the U.S. as the largest growth engine within the overall Lifeco franchise," said Paul Mahon, president and CEO of GWL.
The combined entity, which does not yet have a name, will be run by Robert Reynolds, president and CEO of Putnam. Reynolds will continue on in those roles.
The combined size of the two retirement businesses is more than US$200 billion of assets under administration and more than five million participants.
The divisions are expected to be complementary as GWF focuses on the small to medium end of the 401K market while Putnam's business is in the medium to large side.
GWL and Putnam have had a relationship since 2007 when the former bought the then-troubled mutual fund company for US$3.9 billion.
Mahon said the merger will have no direct impact on the company's Canadian customers but there could be some benefits down the road.
"As we look at Lifeco, we look to try to leverage capabilities from one market into another market. As our U.S. operation gets stronger, we'll have greater opportunities to leverage it to Canada and to Europe," he said.
Jeff Orr, GWL's chairman, stepped in during Thursday's conference call to make it clear the merging will end with the retirement divisions.
"The businesses of Putnam Investments and Great-West (Financial) going forward are not going to be integrated. There are no plans to integrate the overall businesses," he said.
GWL and its stable of companies have US$758 billion in consolidated assets under administration. The company's shares (GWO/TSX) closed down 33 cents, or slightly more than one per cent, to US$29.83 in Thursday's trading.