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Portfolio > Alternative Investments > Real Estate

Insurer Battens Down Real Estate Hatches

By Staff Writer

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MetLife Inc. recently gave stable value fund investors a peek at its strategy for coping with a possible downturn in the U.S. housing market.

MetLife, New York, reduced its exposure to low-rated residential mortgage-backed securities 25% between Dec. 31, 2005, and March 31, 2007, company executives said, according to a written version of the presentation filed with the U.S. Securities and Exchange Commission.

The company now has about $2.6 billion in residential mortgage-backed securities in its portfolio, and about 96% are rated AAA or AA, MetLife says.

All of the securities with lower ratings were issued in 2004 or earlier, the company says.

MetLife also tries to maintain diversity in its commercial mortgage, agricultural mortgage and real estate equity holdings, and low-rated, high-yield commercial mortgages make up only 3% of the commercial mortgage portfolio, the company says.

In addition, MetLife has reduced its New York City real estate exposure to 11% of real estate equity holdings at the end of the first quarter, down from 40% a year earlier, the company says.

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