Real estate market challenges hurt Sun Life’s bottom line in the fourth quarter of 2023.

Quarterly net income declined 36%, or $416 million, from $1.2 billion a year earlier, Sun Life reported.

Toronto-based Sun Life said the decline was driven by unfavourable market-related impacts tied primarily to interest rates and real estate.

Despite a challenging market, the insurance firm’s asset management pillar delivered solid underlying earnings, said Kevin Strain, Sun Life’s president and CEO, in a news release.

Asset management underlying net income grew 2%, or $7 million, year-over-year to $331 million. SLC Management, which includes global commercial real estate investment firm BGO, was up $22 million.

The SLC increase was driven by higher fee-related earnings and higher net seed investment income, said Sun Life. 

SLC has $109 billion in real estate assets under management and operates in 14 countries.

Sun Life ranks among Canada’s largest institutional commercial real estate investors. At year-end 2023, the company had total global assets under management of $1.40 trillion.