After managing assets solely for its own account, MetLife is looking to expand into the third-party asset management business.
According to an announcement, the largest US life insurer will build an asset management business for outside investors focusing on investments in real estate equity, commercial mortgages and private debt.
Steven Goulart, MetLife's chief investment officer, said in a statement: “Asset management is a capital efficient business with attractive returns on equity. The strong demand for private assets among institutional investors makes this an attractive time for market entry.”
Robert Merck, global head of real estate investments, will continue to run the real estate group, which has been renamed MetLife Real Estate Investors. It currently manages about $43 billion of commercial mortgages and $10 billion in direct real estate investments, all of which will be overseen as part of the new real estate management business.
To accommodate this change, MetLife is reorganising its real estate team. The new equity strategies group will be run by Mark Wilsmann, who has led MetLife's commercial mortgage business since 2003. The new debt strategies group, which will raise funds for real estate projects from institutional investors that include other insurance companies, pension plans and sovereign wealth funds, will be run by Brian Casey, who has been heading MetLife's Washington DC real estate office.
Currently, MetLife plans to leverage the more than 100 people it already has in its real estate and private placement areas. The firm, however, does anticipate supplementing the team with some new hires in several areas, such as marketing, over the coming year.
MetLife has no immediate plans to acquire other asset management firms, however. “Right now, our focus is building on the strength we have in-house,” said a spokesman.
He also declined to comment on any specific fundraising or investment plans.
MetLife, which manages approximately $500 billion in general account assets for its policyholders, currently has a small third-party management business focusing on index funds and manages about $50 billion of privately placed debt.