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Portfolio > Investment VIPs

MetLife to Acquire Bond Manager

By Allison Bell

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MetLife Inc. today prepared for life after the Brighthouse Financial Inc. spinoff by agreeing to acquire a firm with experience managing fixed-income investments.

(Related: SEC Clears MetLife to Complete Brighthouse Spinoff)

MetLife said it expects to pay Fortress Investment Group L.L.C. about $250 million in cash to buy 100% of the Fortress stake in Logan Circle Partners L.P.

Steven Goulart, MetLife’s chief investment officer, said in a statement about the deal that adding Logan Circle Partners should help MetLife work with more institutional investment consultants.

MetLife hopes to close on the deal by Sept. 30.

MetLife 

MetLife has now received all of the regulatory approvals and other approvals it needs to make its retail life and annuity unit, Brighthouse, a separate company.

MetLife is preparing to convert Brighthouse into a stand-alone company Aug. 4, by giving investors one share of Brighthouse stock for every 11 shares of MetLife stock that they own. Brighthouse is set to begin ordinary trading on the Nasdaq Stock Market Aug. 7.

MetLife will still have large U.S. group life, retirement plan and non-retirement employee benefits operations after the spinoff. The company noted in the Logan Circle Partners announcement that it will emerge from the spinoff with about $560 billion in total assets under management, including about $140 billion in outside assets.

Logan Circle Partners

Logan Circle Partners is a Philadelphia-based money manager that helps investment firms, large companies, insurers and government agencies manage fixed-income securities

The firm was founded in 2007, by Delaware Investments veterans, just as the Great Recession was rolling in.

Fortress Investment, a New York-based investment manager, announced in February 2010 that it had agreed to pay Guggenheim Partners L.L.C. $21 million for control of Logan Circle Partners.

Logan Circle Partners ended 2016 managing about $33 billion in assets, including about $1.5 billion in insurance company assets, according to a presentation the firm prepared for CalOptima, county-run health plan in Orange County, California, in April.

In the CalOptima presentation, another insurer investment manager showed, in a portfolio diversification analysis, that Logan Circle Partners had put much of the money it was managing for CalOptima in money market funds, variable and floating rate fixed-income securities, medium-term notes, and U.S. Treasuries. The Logan Circle Partners portion of CalOptima’s portfolio easily met CalOptima’s asset diversification requirements.

Logan Circle Partners told CalOptima it had 80 employees, including 10 working in portfolio management, 20 in research, 14 in trading and four in risk management and portfolio analytics. 

— Read S&P Eyes Pension Risk Transfer Business on ThinkAdvisor

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