MetLife to Acquire Logan Circle, Add $33 Billion in Assets

  • Insurer to expand fixed-income strategies for clients
  • CEO Kandarian says deal fits with focus on cash flow

MetLife Inc., the largest U.S. life insurer, agreed to buy Logan Circle Partners from Fortress Investment Group LLC, adding a fixed-income manager that oversees more than $33 billion.

The insurer will pay about $250 million in cash in the deal, which is expected to be completed this quarter, New York-based MetLife said Friday in a statement.

MetLife Chief Executive Officer Steve Kandarian has been reshaping the company, pushing into asset management to increase fee income while working to exit capital-intensive businesses like retail annuities. The deal for Logan Circle will expand to more than $140 billion the sum that MetLife oversees for third parties.

“This transaction is directly aligned with our enterprise strategy to deliver value by focusing on businesses with strong risk-adjusted internal rates of returns, low capital intensity and sustainable cash flows,” Kandarian said in the statement. “Logan Circle Partners will bring a talented team with a track record of outperformance.”

Fortress is reshaping its portfolio ahead of its planned sale to Japan’s SoftBank Group Corp., which is expected to be completed by year-end. Fortress acquired Logan Circle in April 2010 for $19 million, gaining $11.4 billion in assets under management. The unit generated losses each year until 2016, when it posted $4 million in pretax distributable earnings, or 1.1 percent of Fortress’s total profit.

Steven Goulart, MetLife’s chief investment officer, said the deal adds about 80 employees and gives the asset manager better reach in the consultant and sub-advisory distribution channels.

MetLife’s investment unit has “been focused really on private asset categories,” he said Friday in a phone interview. “And we’ve been working hard to try and figure out the right way to get into the more public fixed-income strategies.”

Logan Circle, led by CEO Jude Driscoll, invests in fixed-income assets across a range of maturity and risk, including short, intermediate and long duration; core and core-plus; investment-grade credit; high-yield; and emerging-market debt.

MetLife said the deal won’t impact its plan to repurchase $3 billion of stock by the end of this year. The insurer’s bank on the deal is Moelis & Co., and Morgan Lewis & Bockius LLP provided legal advice. Fortress used Bank of America Corp. and Skadden Arps Slate Meagher & Flom LLP, according to the statement.

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