NEW YORK CITY—MetLife Inc. said Tuesday evening it had formed a real estate investment venture with New York State Common Retirement Fund, the nation's third largest public pension fund. The venture's initial investment portfolio comprises seven properties valued at more than $1.4 billion.

MetLife sold a 49.9% stake in the portfolio to the pension fund. The portfolio properties total approximately 3.7 million square feet, primarily office space, and are located in major US markets; the insurer did not identify the locations of the properties.

The portfolio will be managed by MetLife Investment Management, the company's institutional investment business. MetLife continues as the majority owner of the portfolio and administrator of the JV.

Robert Merck, senior managing director and head of global real estate for MetLife, says his company and the NYSCRF share "a strategy of investing for the long term, and we look forward to growing this equity real estate portfolio with them for many years to come." In December 2013, MetLife and Norges Bank Investment Management formed a JV to buy high quality office properties in major US markets; to date that venture has acquired four properties.

Bloomberg Business reported Tuesday that MIM CIO Steven Goulart has been boosting  the business' asset management operations, which are generally less caital intensive than life insurance products. With about $20 billion in commitments from third-party investors, MIM has sought to expand its offerings, emphasizing structured finance and high-yield debt to attract clients such as pensions, sovereign wealth funds and other insurers, according to Bloomberg.

The JV comes a week after MetLife announced plans to separate a large portion of its retail businesses, whether via a spin-off, a public offering of shares in an independent company or a sale.  The new entity, which would have approximately $240 billion of total assets, would include MetLife Insurance Co. USA, General American Life Insurance Co., Metropolitan Tower Life Insurance Co. and several subsidiaries that have reinsured risks underwritten by MetLife Insurance Co. USA.

"As a result of our Accelerating Value strategic initiative, MetLife has been evaluating opportunities to increase sustainable cash generation and is directing capital to businesses where we can achieve a clear competitive advantage and deliver a differentiated value proposition for customers," Steven A. Kandarian, MetLife's chairman, president and CEO, said last week. He added that the US retail segment helped to earn MetLife a Systemically Important Financial Institution designation from the Financial Stability Oversight Council, "and risks higher capital requirements that could put it at a significant competitive disadvantage."