MetLife Forms $1.4 Billion Property Venture With N.Y. Fund

Updated on
  • Insurer sells 49.9% stake in a portfolio to pension fund
  • Portfolio includes seven properties, mostly office space

MetLife Inc., the largest U.S. life insurer, formed a real estate venture with the New York State Common Retirement Fund, including an initial investment portfolio valued at more than $1.4 billion.

The insurer, which is seeking to expand in asset management, sold a 49.9 percent stake in the properties to the pension fund, the New York-based company said Tuesday in a statement. The portfolio, which will be overseen by MetLife’s asset manager, includes seven properties and represents about 3.7 million square feet (340,000 square meters), primarily office space in major U.S. markets.

Chief Investment Officer Steven Goulart has been bolstering asset-management operations, which are generally less capital intensive than life insurance products and help generate fee income. MetLife Investment Management, which has about $20 billion of commitments from third-party investors, has been seeking to expand its offerings, pushing into structured finance and high-yield debt to attract clients such as pensions, sovereign wealth funds and other insurers.

The New York fund and the insurer “share a strategy of investing for the long term,” Robert Merck, senior managing director and head of global real estate for MetLife, said in the statement, which didn’t disclose the locations of the buildings. “We look forward to growing this equity real estate portfolio with them for many years to come.”

In 2014, the insurer expanded its real estate joint venture with Norway’s sovereign wealth fund, investing in properties in San Francisco and Washington.

(Updates with MetLife comment in fourth paragraph.)
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