MetLife Investment Management Closes $1.2 Billion Private Equity Partners Fund II Through Managed Transaction

Rhea-AI Summary

MetLife Investment Management (MIM) has successfully closed its second private equity fund, securing $1.2 billion in commitments. The fund, known as MetLife Investment Private Equity Partners II, acquired a diverse portfolio valued at approximately $860 million, with total commitments reaching $975 million. This transaction was primarily anchored by funds managed by Lexington Partners L.P.

The new fund aims to deploy an additional $250 million into new private equity opportunities. MIM's private equity investments have shown strong long-term performance, contributing to the strategic expansion of its institutional client solutions. The transaction also involved syndicating a portion to other institutional clients, further diversifying the portfolio, which consists of nearly 50 private equity and equity co-investments globally.

As of March 31, 2024, MetLife's private equity portfolio held $14.3 billion in assets, reflecting significant growth and robust returns. Evercore served as the advisor for this transaction, reinforcing MIM's leadership in private market investments.

Positive

• MetLife Investment Management secured $1.2 billion in commitments for its second private equity fund.
• The new fund acquired a portfolio valued at $860 million.
• The fund has total commitments of $975 million.
• MIM plans to deploy an additional $250 million into new private equity opportunities.
• MetLife's private equity portfolio held $14.3 billion in assets as of March 31, 2024.
• The transaction was anchored by funds managed by Lexington Partners L.P.

Negative

• None.

Insights

Financial Analyst

MetLife Investment Management's (MIM) recent closure of a $1.2 billion private equity fund marks a significant milestone in their growth strategy. This move is pivotal because it highlights MIM's capability to leverage its extensive private equity investments, demonstrated by their strong historical performance. From a financial perspective, institutional investors may find this development promising due to the fund's diversified portfolio, comprising of nearly 50 private equity and co-investments worldwide.

MIM’s decision to deploy $250 million into new private equity opportunities indicates a strong confidence in the potential for future returns. The involvement of Lexington Partners, a reputable player in the secondary private equity market, further strengthens the credibility of this transaction. The track record of deploying over $20 billion in alternative investments between 2010 and 2023 suggests robust experience and prudent management practices.

Short-term, this could boost MetLife's stock by attracting more institutional investors seeking stable and diversified investment avenues. Long-term, the performance of this new fund will be critical in determining sustained growth and investor confidence. However, investors should be aware of the inherent risks associated with private equity investments, which include liquidity constraints and market volatility.

Market Research Analyst

The launch of MetLife Investment Private Equity Partners II is a strategic extension of MIM’s platform, tapping into a niche yet growing market of secondary private equity transactions. The transaction's structure, involving a managed secondary sale and syndication to unaffiliated institutional clients, reflects a sophisticated approach to enhancing liquidity options for investors while diversifying risk.

This strategic alignment with Lexington Partners, known for their expertise in secondary private equity, underscores MIM’s objective to offer differentiated investment solutions. By doing so, MIM not only capitalizes on existing private equity assets but also positions itself as a leader in innovative financial solutions, appealing to a broader range of institutional investors.

From an industry perspective, the expansion into secondary private equity markets aligns with increasing trends of institutional investors seeking more diversified, risk-adjusted returns. This also demonstrates confidence in MIM’s ability to manage a globally diversified portfolio, a important factor in attracting and retaining large-scale institutional investors.

Investors should monitor how this fund performs relative to benchmarks in secondary private equity markets. While the diversification reduces risk exposure, the fund's success will ultimately depend on the quality and performance of the underlying investments.

New fund extends MIM’s private equity platform for institutional investors

WHIPPANY, N.J.--(BUSINESS WIRE)-- MetLife Investment Management (MIM), the institutional asset management business of MetLife, Inc. (NYSE: MET), today announced the launch of its second private equity fund for institutional clients in concert with the closing of approximately $1.2 billion in commitments to a new MIM-managed fund-of-funds.

The new fund, MetLife Investment Private Equity Partners II, purchased a portfolio of approximately $860 million of private equity and equity co-investment interests with funded and unfunded commitments totaling $975 million from MetLife affiliates as part of a managed secondary sale transaction anchored by funds managed by Lexington Partners L.P., which served as lead investor.

“MIM continues to expand its client solutions with this new fund, which leverages our deep private equity investment capabilities and further demonstrates our leadership in investing in private markets,” said John McCallion, MetLife’s chief financial officer and head of MetLife Investment Management. “The strong long-term performance of our private equity investments drove the creation of this differentiated investment solution.”

MIM syndicated a portion of the transaction to other unaffiliated institutional clients. MIM intends to deploy approximately $250 million on behalf of the fund on new private equity opportunities.

The portfolio of assets acquired by the fund consists of nearly 50 private equity and equity co-investments diversified globally. The sale follows strong returns for the MetLife general account’s private equity portfolio, which held $14.3 billion in private equity assets as of March 31, 2024.

“We are thrilled to partner with MIM on this innovative transaction,” said Wil Warren, partner and president of Lexington Partners. “MIM Private Equity Partners II represents a high-quality, diversified portfolio which we believe stands out in today’s secondary market, and we look forward to working with MIM on this investment going forward.”

MIM’s private equity team has deployed over $20.0 billion of alternative investments between 2010 and 2023. Evercore served as advisor to MIM for this transaction.

About MetLife Investment Management
MetLife Investment Management, the institutional asset management business of MetLife, Inc. (NYSE: MET), is a global public fixed income, private capital and real estate investment manager providing tailored investment solutions to institutional investors worldwide. MetLife Investment Management provides public and private pension plans, insurance companies, endowments, funds and other institutional clients with a range of bespoke investment and financing solutions that seek to meet a range of long-term investment objectives and risk-adjusted returns over time. MetLife Investment Management has over 150 years of investment experience and as of March 31, 2024, had $593.7 billion in total assets under management.¹

About MetLife
MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (“MetLife”), is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management to help individual and institutional customers build a more confident future. Founded in 1868, MetLife has operations in more than 40 markets globally and holds leading positions in the United States, Asia, Latin America, Europe and the Middle East. For more information, visit www.metlife.com.

About Lexington Partners
Lexington Partners is one of the world’s largest and most successful managers of secondary private equity and co-investment funds. Lexington helped pioneer the development of the institutional secondary market over 30 years ago and created one of the first independent, discretionary co-investment programs 26 years ago. Lexington has total capital in excess of $76 billion and has acquired over 5,000 interests through more than 1,000 transactions. Lexington’s global team is strategically located in major centers for private equity and alternative asset investing across North America, Europe, Asia, and Latin America. Lexington is the global secondary private equity and co-investments specialist investment manager of Franklin Templeton. Additional information can be found at www.lexingtonpartners.com.

Forward-Looking Statements
The forward-looking statements in this news release, using words such as “continue,” “intend,” “going forward” and “seek,” are based on assumptions and expectations that involve risks and uncertainties, including the “Risk Factors” MetLife, Inc. describes in its U.S. Securities and Exchange Commission filings. MetLife’s future results could differ, and it does not undertake any obligation to publicly correct or update any of these statements.

Endnotes
¹Total assets under management is comprised of all MetLife general account and separate account assets and unaffiliated/third party assets, at estimated fair value, managed by MIM. See MetLife’s total assets under management fact sheet for the quarter ended March 31, 2024 for further information.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240708915514/en/

For Media:

Dave Franecki

+1 (973) 264-7465

dave.franecki@metlife.com

Source: MetLife Investment Management

FAQ

What is the value of the portfolio acquired by MetLife Investment Private Equity Partners II?

The portfolio acquired by MetLife Investment Private Equity Partners II is valued at approximately $860 million.

How much did MetLife Investment Management secure in commitments for its second private equity fund?

MetLife Investment Management secured $1.2 billion in commitments for its second private equity fund.

Who anchored the MetLife Investment Private Equity Partners II fund transaction?

The transaction was primarily anchored by funds managed by Lexington Partners L.P.

What is the total commitment value of the new MetLife private equity fund?

The total commitment value of the new MetLife private equity fund is $975 million.

What is the future investment plan for MetLife Investment Private Equity Partners II?

MetLife Investment Private Equity Partners II plans to deploy approximately $250 million into new private equity opportunities.

As of March 31, 2024, what was the total value of MetLife's private equity portfolio?

As of March 31, 2024, MetLife's private equity portfolio held $14.3 billion in assets.