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MetLife Ties Up With State Street to Buoy Investment Business

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 MetLife Investment Management — the institutional asset management platform for MetLife, Inc. MET — has tied up with State Street Corporation STT.

Per the multi-year agreement, MetLife Investment Management and its affiliates will originate and service for State Street affiliates up to $2 billion in commercial mortgage loans. Both entities will co-lend each loan under the agreement.

MetLife Investment Management provides institutional investors with long-term public and private investment, and financing solutions. This latest deal with State Street will further aid the unit to grow its real estate platform by offering a wider range of real estate financing options to its borrowers.

Currently, MetLife is seeking options to grow in new fixed income strategies and in new markets. In this vein, the company acquired a bong fund specialist, Logan Circle Partners. Earlier this year, MetLife Investments Asia Limited received its asset management license from the Securities and Futures Commission in Hong Kong.

Increasing interest rate along with easing regulatory pressures leads to a favorable environment for growth of investment management business. This business includes expertise in specialty fixed income assets, comprising real estate, agriculture, private placements and structured products. After years of low interest rates and regulatory challenges, MetLife is eagerly trying to build this business.

Meanwhile, MetLife has been busy streamlining its business to focus on low risk and low capital intensive business, and the one that provides a steady stream of revenue flows. Notably, its Investment management business fits this bill and thus is a prospective growth contributor to the group’s earnings. The unit manages loans of about $57 billion.

The current deal will further lead to additional loan originations, which in turn is likely to result in an increased fee income.

In a year’s time, the stock has lost 9.9% compared with the industry's 10.3% decline.

 

MetLife carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Alleghany Corp. Y and NMI Holdings Inc. NMIH. Both Alleghany and NMI Holdings sport a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Alleghany surpassed estimates in three of the trailing four quarters, with an average beat of 17.1%.

NMI Holdings beat estimates in each of the preceding four quarters, with an average positive surprise of 29.85%.

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State Street Corporation (STT) : Free Stock Analysis Report
 
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