MetLife to open money management business targeting institutional investors
By Kevin Olsen | October 8, 2012 3:44 pm
MetLife is launching a third-party money management business, MetLife Investment Management, which will target public and private pension funds, sovereign wealth funds and insurance companies, said Steven Goulart, MetLife executive vice president and chief investment officer, in a telephone interview.
The new brand will be split into two divisions — MetLife Real Estate Investors, which will manage real estate equity and commercial mortgages, and MetLife Private Capital Investors, which will handle private placement debt, project finance and infrastructure debt and equity in renewable energy.
Mr. Goulart said he could not go into details on specific products, but said the firm “will offer a lot of vehicles.”
“We are going to focus our efforts on these asset classes because we think there is a market opportunity and we have the existing expertise more directly related to third-party asset management,” Mr. Goulart said.
MetLife has had third-party asset management businesses in the past, but “the difference here is we are doing it organically and doing it with those people that built the general account business,” Mr. Goulart said. The company owned State Street Research & Management, selling it to BlackRock (BLK) in 2004.
MetLife currently manages $50 billion in private placement, $43 billion in real estate loans and $10 billion in direct real estate investments, all general account assets.
“We think it’s a very good opportunity in spite of the interest-rate environment,” Mr. Goulart said about the private debt business. Pension plans “don’t typically have access to these asset classes. It’s very good and useful for liability-driven investing techniques.”
MetLife currently manages about $20 billion for institutional investors, but mostly in index assets, Mr. Goulart said. Those assets will become part of MetLife Investment Management.
As part of the expansion, MetLife expects to hire at least 20 people from outside the company to help in areas such as fundraising, marketing and customer servicing.
Robert Merck, senior managing director and global head of real estate investments, will head up MetLife Real Estate Investors. Mark Wilsmann, managing director and head of real estate portfolio management, will lead the equity strategies group and Brian Casey, head of the Washington regional real estate office, will lead the debt strategies group. Both will report to Mr. Merck.
Scott Inglis, managing director and global head of private securities, will lead MetLife Private Capital Investors.
Boston Consulting Group assisted MetLife with forming the new business.