Market Overview

MetLife To Buy Logan Circle, Expand Investment Management


MetLife, Inc. MET has entered into a definitive agreement with Fortress Investment Group LLC FIG to acquire its traditional fixed income asset management business — Logan Circle Partners, L.P. The acquisition is expected to close in the third quarter.

The deal valuing $250 million will be funded in cash. Per management, the shelled out cash will not deter it from carrying on with its $3 billion share buyback program, which is expected to be completed by the end of this year.

The transaction is in line with MetLife's efforts to grow in business areas that require low capital but provide strong risk-adjusted internal rates of returns and sustainable cash flows. In the same vein, the company is also undergoing the spin-off of its retail life unit named Brighthouse Financial. This business has locked significant capital and carries equity and interest rate risks.

Business restructuring efforts have been taken positively by investors as evident by share price appreciation of 41% compared with the gain of 39% by the Zacks categorized  Insurance - Multi line industry.

Following the parting away of Brighthouse Financial and the addition of Logan Circle, MetLife's Investment Management business would have more than $560 billion in total assets under management.

MetLife has picked Logan Circle by virtue of its superior investment performance, client service, and risk management. Since 2010-2016, Logan Circle's asset under management has grown from $11.7 billion to $33.7 billion.

This fundamental research-based investment management company serves nearly 100 institutional clients. Its senior management having an investment experience of more than 20 years provides an array of actively managed investment solutions across a broad spectrum of fixed income strategies.

With Logan Circle, MetLife via its Investment Management business will be able to offer its domestic and international clients a wider set of investment solutions, which will broaden its reach in the consultant distribution channel.

MetLife carries a Zacks Rank #3 (Hold). Some better-ranked players in the same segment are FBL Financial Group Inc. FFG and Cigna Corp. CI. Each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

FBL Financial beat estimates in two of the last four quarters, with an average positive surprise of 1.98%.

Cigna beat estimates in three of the last four quarters, with an average positive surprise of 1.35%.

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Fortress Investment Group LLC (NYSE: FIG): Free Stock Analysis Report
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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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