MetLife Inc., the largest U.S. life insurer, said fourth-quarter profit slipped 45 percent as investment results deteriorated in private equity and hedge funds.

Net income fell to $834 million from $1.52 billion a year earlier, the New York-based insurer said Wednesday in a statement. Operating profit, which excludes some investment results, was $1.23 a share, missing the average $1.36 estimate from 17 analysts surveyed by Bloomberg.

Chief Executive Officer Steve Kandarian is facing dual threats to the investments portfolio. Low interest rates are squeezing income from bonds. And so-called variable holdings, such as private equity or hedge funds, have been pressured by market volatility.

Profit declined “as a result of lower variable investment income, which can be volatile, as well as a strong U.S. dollar,” Kandarian said in the statement. “While 2015 was a challenging year overall, our plan to separate a substantial portion of the U.S. retail business demonstrates our willingness to take bold steps to maximize shareholder value.”

Kandarian is reshaping the company’s business mix to reverse a stock slump and respond to pressure from regulators. He said last month that MetLife is weighing a spinoff, sale or public offering of a U.S. retail operation with $240 billion in assets, a move that would limit risks from products like variable annuities, where market fluctuations can have an outsized effect on results.

Workplace Benefits

Workplace benefits and property-casualty coverage are among businesses that would become more prominent in a scaled-back company. These segments tend to be less capital intensive, which could also help Kandarian’s goal of returning a greater portion of net income to shareholders. The insurer has limited share buybacks after being designated by U.S. regulators as a systemically important financial institution, a tag that can bring tighter capital rules.

Book value, a measure of assets minus liabilities, dropped to $60 a share as of Dec. 31 from $61.39 as of Sept. 30. That compares with the company’s closing price of $41.95 at 4:03 p.m. in New York. Results were released after regular trading. The company has slipped 13 percent this year after falling 11 percent in 2015.

Operating return on equity was 9.7 percent for both the fourth quarter and the full year 2015. Kandarian said in May that MetLife will probably miss its goal of having a 12 percent ROE in 2016, citing increased regulation and low interest rates that pressure income from the company’s bond portfolio. Full- year net income was $5.31 billion in 2015, compared with $6.31 billion the year before. The 2015 result included a third- quarter charge of $792 million tied to U.K. taxes.

Fourth-quarter net investment income slipped 9.8 percent from a year earlier to $4.91 billion. Holdings of variable assets, which include hedge-fund bets, generated $109 million in the period, compared with $325 million a year earlier. Peter Hancock, the CEO of competitor American International Group Inc., said last week that he would scale back hedge-fund bets after experiencing “greatly disappointing” returns on those holdings over the last three or four years.

Derivative Losses

Adjusted net derivative losses widened to $375 million in the quarter from $40 million in the same period a year earlier. MetLife uses the financial products to hedge fluctuations in interest rates and currencies in an investment portfolio valued at about $500 billion.

The insurer in November said benchmark 10-year Treasury yields won’t reach a “normalized” level of 4.5 percent for another 11 years, after previously projecting it would take three years to climb to that level.