MetLife Inc., the largest U.S. life insurer, said it will begin offering asset management for institutional investors as part of Chief Executive Officer Steven Kandarian's push to expand fee income.

"Asset management is a capital-efficient business, with attractive returns on equity," Chief Investment Officer Steven Goulart said today in a statement distributed by the New York- based insurer. "The strong demand for high-quality private assets among institutional investors makes this an attractive time for market entry."

Kandarian is scaling back from capital-intensive products such as variable annuities as he targets return on equity of at least 12 percent by 2016. The insurer, with more than $500 billion in its investment portfolio backing policyholder obligations and generating shareholder returns, will focus the third-party initiative on real estate and private-placement debt, areas in which the company already invests.

Goulart, a former Bear Stearns & Co. banker who joined MetLife in 2006, is overseeing the expansion. Clients will include other insurers, pension plans and sovereign wealth funds, MetLife said.

Wall Street firms including JPMorgan Chase & Co. and BlackRock Inc. are vying to manage money for institutional investors seeking returns after the Federal Reserve pledged to keep borrowing costs low to stimulate the economy.

Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein and President Gary Cohn wrote in the bank's 2011 annual report that outsourcing of asset management by insurers has accelerated because of "new capital regimes, greater demand as a result of the financial crisis and a sustained low interest rate environment."