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Goulart to Oversee MetLife's $450 Billion Portfolio

Posted on 03 May 2011

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The largest U.S. life insurer, MetLife Inc., selected Steven J. Goulart as chief investment officer to oversee a portfolio valued at more than $450 billion.

Goulart, 52, replaces Steven Kandarian, who became chief executive officer of the New York-based insurer on May 1st. The portfolio expanded by about 75 percent in six years under Kandarian through acquisitions and investment gains.

MetLife is one of the largest bond investors, with more than $320 billion in fixed-income holdings, including corporate debt, government bonds and asset-backed securities. Kandarian, a former private-equity executive, had braced MetLife for the housing slump by selling Manhattan’s largest apartment complex in 2006 at a $3 billion gain.

“You’re invested in every asset type globally, and you have to manage credit and interest rate risk, it’s a big job,” Randy Binner, an analyst at FBR Capital Markets, said in an interview last week. “They are not there to take too much risk, but at the same time, they need to find yields that are adequate to back up the liabilities and for MetLife to still make a profit on behalf of shareholders. That is not easy.”

MetLife is expanding in nations including Japan after the purchase of a unit from rival American International Group Inc. last year for more than $16 billion. The insurer had purchased credit-default swaps to protect against declines in Portugal’s sovereign debt.

The investment chief needs a “very global view because increasingly MetLife is going to be generating cash flows in non-U.S. dollar liabilities,” Binner said.

Goulart was head of mergers and acquisitions at MetLife where he worked on the deal to buy the American Life Insurance Co. business from AIG. He also served as treasurer, a role he was appointed to in 2009.

“Steve’s experience both inside and outside of MetLife makes him well suited to lead our investments department,” Kandarian, 59, said in the statement today announcing the promotion. “The investments department will continue to provide value for our shareholders through solid returns and security for our policyholders through a strong balance sheet.”

Goulart will oversee a staff of more than 650 in his new role, the insurer said. He joined MetLife in 2006 after working at Bear Stearns Cos. as senior managing director in the financial institutions group and co-head of the insurance practice. He has a master’s degree in business administration from Harvard University.

“It’s a pretty rarefied world,” of managers who are qualified to oversee such a portfolio, said Tim White, managing partner at recruiting firm Kaye/Bassman International Corp. in Dallas, in an interview before the announcement. “There might be less than 100 people that could do that job globally.”