In a deal that could boost its clout with big pension fund investors, Atlanta Life Financial Group’s asset management unit has agreed to manage another $100 million in general accounts for New York-based financial services powerhouse MetLife Inc.
The latest agreement expands the relationship between MetLife and Atlanta Life Investment Advisors that began in July 2004 with an initial $50 million contract. Under the agreements, ALIA manages the investments according to MetLife guidelines.
MetLife now accounts for about a third of ALIA’s assets under management, says Chief Investment Officer Kenneth Holley.
ALIA has brought in an additional $125 million since the latest MetLife investment, increasing its current assets under management to about $385 million. Holley says the deal with such a high-profile client endorses his firm’s investment philosophy and process and could go a long way in helping it win new clients.
“This transaction gives us an opportunity to win creditability in the pension-fund community,” he says.
Holley also says that with the latest investments from MetLife and other clients, ALIA will likely be profitable this year, versus taking a loss in 2004.
Robert Benmosche, MetLife’s chairman and CEO, says the good job ALIA has done with MetLife’s investments is a big part of why his company is expanding the relationship. The performance of the $50 million fund is up about 15.8% since July 2004, well above MetLife’s 5.2% benchmark for equities for that time period.
“Initially we did it [the agreement] to give them an opportunity,” Benmosche says. “And now we’re giving them more money because their performance is great.” According to MetLife, the $150 million investment is 3% of MetLife’s Equities and Other Limited Partnerships.
The companies’ relationship began in 2002, when MetLife and Atlanta Life’s flagship insurance subsidiary, Atlanta Life Insurance Co., formed a reinsurance alliance to provide group life insurance and accidental death and dismemberment benefits.