Investing runs in Randall Shu’s blood. The director of alternative investments at MetLife grew up listening to his parents talk about running their real estate business and managing the family finances. As a senior member of the alternatives team, the 34-year-old helps oversee the hedge fund portfolio for the Manhattan-based life insurer’s pension fund, which was valued at $8.75 billion as of last December, according to a Securities and Exchange Commission filing, and its $500 billion in general account assets. A native of Livingston, New Jersey, Shu shipped off to upstate New York to attend Binghamton University in 1998, graduating three years later with a BS in finance and management information systems. He soon joined MetLife as an analyst and became a founding member of the firm’s hedge fund team, which launched in 2004. MetLife had a long history of investing in private equity and pushed into hedge funds to diversify its alternatives portfolio. Because of strict risk-based capital regulations that require insurance companies to back up investments in alternatives and equities with large amounts of capital, the firm and its peers tend to allocate relatively low percentages of their assets to hedge funds. This presents a unique challenge for Shu, whose three-person team must be confident that they can meet their return objective to justify the capital charge of a new hedge fund investment. To that end the group has developed an exceptionally thorough due diligence process. Shu, who holds an MBA from New York University, and his two colleagues also take a holistic view of the hedge fund portfolio and adjust their weightings to different strategies and sectors to ensure that they clear their return hurdles. Their mix of allocation and manager selection has given MetLife the diversification benefits it craves.
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