PSP Investments and Lightyear Capital have signed a definitive agreement to acquire AIG Advisor Group, a subsidiary of American International Group (AIG).

“We are pleased with this transaction, which is in line with PSP Investments’ private equity strategy of making sizable, direct investments in high-quality companies alongside experienced partners,” said Guthrie Stewart, senior vice president, global head of private investments at PSP Investments, in a news release.

“We see multiple growth levers to drive Advisor Group’s future performance and look forward to collaborating with Lightyear and the Advisor Group management team to deliver on that plan.”

Read: PSP Investments to sell joint venture stake

PSP Investments is one of Canada’s largest pension investment managers, with $112 billion of assets under management at March 31, 2015. It invests funds for the pension plans of the public service, the Canadian Forces, the Royal Canadian Mounted Police, and the Reserve Force.

Lightyear Capital, through its three affiliated private equity funds, has raised more than $2.5 billion of capital and makes primarily control investments in North America-based, middle-market financial services companies.

“We believe advisors, clients and partners of Advisor Group will benefit from Lightyear’s and PSP Investments’ ownership of the independent business, and we look forward to a continued relationship with Advisor Group as an important distributor of AIG products,” said Peter Hancock, president and CEO of AIG.

The transaction is expected to close in the second quarter of 2016, subject to regulatory approvals.

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