US life insurer MetLife is set to launch a third-party asset management business to tap opportunities in private asset sectors, including real estate equity, commercial mortgages and private placement debt.
The proposed business will operate as MetLife Investment Management and concentrate to generate long-term returns for institutional investors, such as insurance companies, public and private pension plans and sovereign wealth funds.
The new unit will operate through two divisions, including MetLife Real Estate Investors, formerly known as real-estate group and MetLife Private Capital Investors, ex- private-placement debt organization.
The real estate division will be headed by the insurer global head of real estate investments, Robert Merck, and will manage investments for both institutional investors and the company itself.
The global head of private securities Scott Inglis will oversee the capital investors division, which will create and manage a range of investments, including corporate private debt, project finance and infrastructure debt, and equity in renewable energy.
The decision to launch third-party asset management business is part of its strategy to increase return on equity to atleast 12% by 2016, to avoid dependency on capital-intensive businesses.
During 2011, the US insurer originated $8.8bn in private placements for its general account and existing third-party accounts, and currently manages a portfolio of nearly $50bn in private investments among over 900 issuers globally.
The company delivers insurance, annuities and employee benefit programs, serving 90 million customers and operates in the US, Japan, Latin America, Asia, Europe and the Middle East.