MetLife Weighs Private Credit M&A to Bolster Earnings Growth

(Bloomberg) -- MetLife Inc. would consider complementary acquisitions in private credit as part of the company’s new strategic plan, according to Chief Financial Officer John McCallion.

“Our pre-existing foothold here puts us in a great position to capture these emerging trends around nonbank lending,” McCallion said Thursday during MetLife’s annual investor day. “We’re a large, long-term, experienced lender here that drives excess spreads with low loss experience.”

MetLife’s private credit business — spanning infrastructure, private structured credit, residential credit, corporate private placements and middle market private capital — originated about $117 billion of assets since 2019.

More broadly, the company expects to benefit from the fragmentation of the asset management industry, as it could fold in smaller players looking for scale, said McCallion, who’s also head of MetLife Investment Management.

MetLife unveiled a new five-year strategic plan on Thursday, the second under Chief Executive Officer Michel Khalaf. The insurer aims to boost its adjusted return on equity to 15% to 17% and generate double-digit growth in adjusted earnings per share.

McCallion also said he expects MetLife’s variable investment income to improve, after lower private equity returns dragged down returns in recent quarters.