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NEW YORK, Feb 4 (Reuters) - MetLife Inc MET.N, the No. 1 U.S. life insurer, said on Wednesday it may write down some investments in large private equity funds during the first half of 2009.
“It is probably fair to say that there will be some marks on those portfolios and some impairments,” Chief Investment Officer Steve Kandarian said on an investor call, a day after MetLife reported better-than-expected fourth-quarter operating income.
He said while 2008 figures were still being compiled by firms, market checks indicated larger funds suffered the most from frozen credit markets.
Private equity firms, gathered for an industry meeting this week in Berlin, have said they are being forced to dive into alternative investments or sit on the sidelines as the credit crisis kills their ability to strike the profitable leveraged buyouts for which they are famed.
Kandarian said the value of large fund investments may have fallen between 10 percent and 20 percent, citing difficulties in spinning off portfolio businesses to public and private investors, given credit market conditions.
The insurer does not yet have a figure for how large its own impairments could be from these investments.
Kandarian, who manages MetLife’s $322.5 billion investment portfolio, said its overall investment in private equity funds was about $3.1 billion, with about $1.2 billion in larger funds. (Reporting by Lilla Zuill, additional reporting by Megan Davies in Berlin; editing by Jeffrey Benkoe)
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