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MetLife Sees Fortress Deal as `Jump Start' for Asset Management

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(Bloomberg) — MetLife Inc., which reached a deal last week to expand its asset manager with the purchase of Logan Circle Partners from Fortress Investment Group L.L.C., said the acquisition is a chance to accelerate growth, even as the insurer builds capabilities internally.

“It’s really all about the time trade-off,” Chief Investment Officer Steven Goulart said Tuesday in an interview on Bloomberg Television, when asked why he chose to pursue a takeover rather than rely on organic growth. “We can jump start what we’re trying to do through Logan Circle.”

(Related: MetLife to Acquire Bond Manager)

Goulart helped the insurer create its asset manager in 2012 to diversify operations and generate fee income. Logan oversees more than $33 billion and will lift to more than $140 billion the sum that MetLife manages for third parties. The deal also adds capabilities in managing publicly traded bonds, complementing long-established operations that invest in real estate and private-placement debt.

“Those are things where we had very unique capabilities, given our history of doing it for nearly 100 years, or more,” when investing funds that backed obligations to insurance policyholders, Goulart said. “When we started MetLife Investment Management, we looked at where could we make the greatest progress right away.”

Since then, MIM has pushed into areas such as structured finance and high-yield debt. The unit has also hired from firms including JPMorgan Chase & Co. and Hartford Financial Services Group Inc. to help build relationships with clients such as pension plans and other insurers.

‘Big Number’

MIM isn’t as large as the asset manager run by rival life insurer Prudential Financial Inc. But Goulart said he’d be open to another deal if the right opportunity comes along and is pleased with the pace of growth.

“To us, $140 billion of third-party asset management is a big number, because four and a half years ago, it was zero,” Goulart said. “We’re thinking about continuing to grow it over time.”

The $250 million Logan Circle deal will add about 80 employees and also help expand the company’s reach to more clients.

“It fits exactly with what we’re trying to do,” Goulart said. “Most importantly, our distribution is almost entirely complementary.”

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


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