MetLife Boosts Private Placements by $9.7 Billion in Yield Hunt

  • Portfolio of private securities is $55.9 billion at insurer
  • Third-party asset manager contributes to increase under Inglis

MetLife Inc., the biggest U.S. life insurer, boosted bets on private placements by investing $9.7 billion last year, an increase of 15 percent from 2014, as low interest rates depressed returns on other holdings and the company expanded a third-party asset management business.

The insurer has a portfolio of $55.9 billion in private securities, led by $40.8 billion in corporate debt and $10.7 billion in infrastructure, according to a statement Thursday.

MetLife had a “busy year as a major lender in the private placement market for both private corporate and infrastructure debt,” Scott Inglis, managing director and head of private placement for MetLife Investment Management, said in the statement. “We believe our institutional investor customers like our scale, trust our expertise and agree with our strategic goals of enhancing returns while managing risk.”

The MetLife Investment Management unit, which serves other insurers, pensions and sovereign wealth funds, oversaw $6.1 billion in private placement assets as of Dec. 31, an increase of about 52 percent from 2014. Most of the $55.9 billion portfolio is held by the company to back policyholder obligations, including some that won’t be due for decades.

Insurers, pressured by the low returns on publicly traded bonds have sought out investments in holdings such as private placements and infrastructure debt to boost returns. MetLife has been investing more in commercial mortgages, loaning a record amount last year.

BlackRock Inc., the world’s largest asset manager, said last month that investors are turning to more-illiquid holdings such as real estate and private credit as they seek to generate returns and combat market volatility.

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