Investment manager

MetLife (MET) considers acquisition of AIM by investment manager ESG

MetLife, Inc.MET’s institutional asset management business, MetLife Investment Management or MIM, recently agreed to acquire Affirmative Investment Management (“AIM”) to augment its environmental, social and corporate governance (ESG) offerings . The London-based $1 billion acquired business is a fixed income manager and focuses on impact investing.

MIM had $590.9 billion in assets under management at the end of the second quarter, while Affirmative Investment Management had just over $1 billion. The latest acquisition will likely strengthen MET’s capabilities to provide clients with long-term risk-adjusted returns while enhancing the ESG investment and reporting portfolio. Financial terms of the agreement have not yet been disclosed.

The acquisition is the latest in the campaign to acquire ESG investment and advisory firms by major asset managers to meet client sustainability demands. MetLife stands to benefit from the takeover of Affirmative Investment Management, which offers single-currency, multi-currency and liquid impact bonds. The deal should give the acquired business access to huge institutional investment capacity.

MetLife uses acquisitions and partnerships to strengthen its capabilities and global presence. These acquisitions will result in business diversification and inorganic growth for the company. Last February, it entered into an alliance with Aura to protect employees’ digital identities. It also acquired Versant Health, which immediately made it the third largest eye care provider in the United States.

The acquisition positioned the company for double-digit adjusted PFO growth. The company also made a foray into pet insurance with the acquisition of PetFirst.

Price performance

MetLife shares have risen 5.5% over the past year, outpacing the 14.7% drop in the industry.

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Zacks ranking and key picks

MetLife currently has a Zacks rank of #3 (Hold). Some stocks ranked higher overall finance space are Ares Capital Corporation ARCC, M. Cooper Group Inc. CO-OP and EZCORP, Inc. EZPW, each carrying a Zacks Rank #2 (Buy) at present. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Based in Los Angeles, California, Ares Capital specializes in bailout financing for middle-market businesses. Zacks consensus estimate for ARCC earnings in 2022 points to 15.1% year-over-year growth.

Based in Coppell, TX, Mr. Cooper Group offers transaction-based services. The Zacks consensus estimate for Mr. Cooper Group’s 2022 bottom line has seen an upward revision in the estimate over the past 30 days versus none in the opposite direction.

EZCORP, based in Austin, Texas, works as a pawnbroker in the United States and Latin America. The Zacks consensus estimate for EZPW’s net income in 2022 points to 94.7% year-over-year growth.

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