Best's Review



Asset Management
The Long & Winding Road

Steve Friedman’s unorthodox career path took him from practicing law to investment banking to a unique, hybrid position with Pan-American Life, managing both its investment portfolio and its business growth strategy, reflecting a reinvented role amid changing industry dynamics.
  • Jeff Roberts
  • December 2018
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Key Points

  • Hybrid Role: Friedman’s position reflects Pan-American’s vision to grow organically in its international business, through M&A domestically and through savvy investments.
  • Big Growth: Pan-American has quadrupled its size in recent years and recorded $60 million in net income in 2017.
  • Big Return: Friedman inherited a $5.2 billion portfolio that has consistently outperformed the industry average.


The bargain was struck as graduation neared.

Steve Friedman had reached a crossroads, one that intersected nearly every aspect of his young life.

The Wharton School senior wanted to be a banker. His parents wanted him to get “a real job”—meaning doctor or lawyer. And then there was a young woman in New Orleans weighing heavily on his mind.

Time was running out to reconcile it all.

“But then I had this romantic notion,” Friedman said some 25 years later, a smile rising in his voice.

He reached a compromise with his parents that led him down an unorthodox and somewhat accidental career path. It culminated in July when he took on a custom-made, hybrid position for Pan-American Life Insurance Group, managing both its investment portfolio and leading its organic growth and mergers and acquisitions initiatives.

Friedman needed that uncharted journey, traversing from the University of Pennsylvania to law school to a global law firm and then to investment banking, to develop the necessary and singular skill set.

The career path, largely outside the insurance and asset management realms, sets him apart from many others in similar roles in the life insurance space, according to industry observers.

And it all started with that fateful deal.

“I'm telling you: Sometimes it's better to be lucky than good. And hopefully you can be both,” Friedman said with a laugh. “There's no question that that variety of experiences has positioned me well.

“They all tie together. I think they have to. I do think it's becoming part and parcel with the business and the industry. We're in a different era today that demands more.”

As executive vice president and chief investment officer, corporate development and strategy, Friedman manages Pan-American's $5.2 billion portfolio and leads its corporate development strategies.

The position reflects a company thinking more holistically about growth, investment return and how to realize its strategic vision. And it illustrates the evolving needs of an international life and health insurer seeking a unique solution.

“Steven's role reflects the natural evolution of the company as we optimize our organizational structure to meet the changing dynamics in the industry and in the business climate more generally,” said José S. Suquet, chairman of the board, president and CEO. He responded to questions via email.

“The cross-section of expertise that Steven has in terms of life insurance, investments, mergers and acquisitions and compliance complements key areas of focus for the company going forward.”

Friedman succeeds Rodolfo “Rudy” Revuelta, who retired after 42 years with PALIG, the last 13 years as chief investment officer. He left behind a high-quality portfolio low on risk and high on return that has consistently beaten the industry average.

But Pan-American, ranked the 99th largest company in A.M. Best's Top 200 U.S. Life/Health Insurers based on 2017 admitted assets, saw an opportunity to reinvent the role.

The New Orleans-based, mutual holding company wants to continue to expand organically in its international business and through M&A in its more established, slower growing domestic business.

And it wanted someone who could manage the portfolio, but still expand a company with a long-established brand name and cultural affiliation among its 4.8 million-strong customer base in 22 Latin American and Caribbean nations and in 49 U.S. states.

Stagnating domestic sales, the prolonged low interest rate environment and shifting industry paradigms have inflicted significant earnings pressure on life insurers. The expanded position offers one potential solution in response to that challenging landscape.

Friedman was uniquely qualified for it. Pan-American leaders knew he was. He had served the company as an external adviser for more than a decade.

And for Friedman, something had been missing.

After more than 20 years of helping clients craft their own development plans, he wanted to actually execute his own strategy. “Real world practical application” he calls it.

“It's one thing to talk theory all day. It's another to actually do the job,” said Friedman, who turned 47 in November and has three sons, ages 12 to 17.

“I had this really terrific seat at the table where I could provide advice to companies, but it was only just that: It was providing advice. I was never fully satisfied.”

Then Pan-American reached out offering something more.


Steven Friedman, Pan-American Life

Steven Friedman
Pan-American Life

We tend to see things coming that we want to be smart about and reposition the portfolio, and have a little dry powder so that if the markets dislocate, we’ll have the opportunity to take advantage of that.

Targeting Growth

Pan-American's story is one of growth.

It has quadrupled its size “in about a 13-, 14-year period despite everything that has gone on,” Friedman said. “Everything” includes the financial crisis and the Great Recession.

That growth attracted Friedman.

The developing middle class in Latin America, where markets are not as mature and penetration rates have been historically lower than in the U.S., has been a driver of its organic expansion.

“We have a lot of people on the ground, and they are indigenous to those countries,” Friedman said. “That cultural divide doesn't really exist for us in a way that it may for many other companies. We've been in those markets for 50, 70, 100 years.”

The U.S. market “provides a lot of stability and ballast” with comparatively low political risk, Friedman said.

M&A also has been a growth source. Pan-American acquired the majority of MetLife's assets in the Caribbean, Panama and Costa Rica in 2012. Then it merged with Mutual Trust Holding in 2015, adding nearly $2.1 billion in assets and strengthening its U.S. business. And last year it acquired HolaDoctor, a digital provider of health and wellness solutions for Hispanic audiences.

In 2017, the company recorded net income of $60 million, an increase of 22.7%. Total assets surpassed $6 billion for the first time, and GAAP revenues reached $1.08 billion.

Friedman inherited a $5.2 billion portfolio in cash and invested assets that has consistently beaten the industry average in yields, ranging from 5.3% to 7.4% over the past five years, according to A.M. Best data.

In that same period, the industry composite exceeded 4.6% just once.

Friedman has received the seal of approval from the man who built that portfolio. And Revuelta's opinion carries weight.

A co-worker referred to him as “one of the founding fathers” of Pan-American, a term of endearment and a gentle ribbing in one, owing to his longevity and importance to the company.

Revuelta initially planned to stay on as a consultant through the middle of 2019 to ease the transition. Then he began working with Friedman.

“I told José, 'I don't think I need to be around for that long,'” Revuelta said. “'Look, you guys made a great decision. I don't want to be in his way.'”

So he's ending the arrangement this month.

“I'm very impressed with him,” Revuelta said. “He brings Pan-American not only knowledge of the company, but sees it through a different lens.”

It took quite a journey for Friedman to develop that perspective.


A Fateful Bargain

The original plan was to study engineering, just like his father.

But by Friedman's sophomore year at Penn, business had become his passion. He had dual concentrations in finance and real estate and worked weekends in New York as an equity research analyst, commuting by train.

There was just one problem. Carol and Aaron Friedman wanted their son to go to medical school or law school.

“I'm not sure they had a great appreciation for corporate finance,” said Friedman, who grew up in Wethersfield, Conn., just outside of Hartford. “I think part of them thought, 'Is he going to be a teller at a window? Or a bank manager?'”

Actually, Friedman had another problem. He was hundreds of miles from his girlfriend, Bethany, who was graduating from Tulane and starting at an accounting firm in New Orleans.

But he was also clever and hard-working, with a predisposition for deal-making and strategic planning. So he made an agreement with his parents that solved those problems.

He would attend law school. But he focused on corporate law, with his eye still on finance. And the program he chose? Tulane Law School—in New Orleans.

So he made his parents happy. He would further the career he still wanted in banking. And that young woman in New Orleans? She is now Mrs. Friedman.

“She has been Mrs. Friedman for 24 years,” he said.

But that was just the beginning. The Friedmans moved to New York, and he practiced for the law firm of White &Case.

“I found that I really loved doing deals and transactions,” Friedman said. About two years later, he had a team of his own as a young associate.

Then he met the head of Credit Suisse First Boston's financial institutions group. After discovering Friedman had a Wharton degree, the executive encouraged him to return to banking, where he could oversee M&A transactions through the entire process.

Friedman was sold. He joined Credit Suisse First Boston, then UBS as co-head of insurance for North America, helped build Greenhill &Co.'s financial services business and served as a senior managing director in Guggenheim Securities' financial institutions group.

As a banker, he advised clients—including Pan-American Life—on more than $200 billion in corporate transactions, such as the buying and selling of business units. He helped shape what those companies would look like in three to five years and realize what they ultimately wanted to become.

“If I had only done one particular thing, I probably wouldn't have as broad a role today or the broad ability to see things,” Friedman said.


José S. Suquet, Pan-American Life

José S. Suquet
Pan-American Life

Steven’s role reflects the natural evolution of the company as we optimize our organizational structure to meet the changing dynamics in the industry.

Uncovering Jewels

Besides that vision, he holds two advantages many of his peers do not have.

He can take a long-term view thanks to Pan-American's mutual ethos. And he is not beholden to the pressure to find yield thanks to the quality portfolio Revuelta left him.

“We don't take a lot of risk on the product, and that's by design,” Friedman said. “We think we can take appropriate risk and earn appropriate return. And we're spending the time looking to uncover some of the jewels in the credit market.”

Revuelta constructed a portfolio that consistently outperformed the industry average. It produced yields of 7.4% in 2013 (versus the industry average of 4.4%), 5.5% in 2014 (5.0%), 5.3% in 2015 (4.6%), 5.5% in 2016 (4.6%) and 5.5% last year (4.4%).

Pan-American maintains a “well-performing” and “high-quality fixed-income investment portfolio that has avoided large investment losses and is in a net unrealized gain position,” according to its A.M. Best credit report.

“Investments have been one of Pan-American Life's core strengths for decades,” said Suquet, the chairman and CEO. “In fact, one of the things that attracted me personally to the company was the strength of the balance sheet and the investment portfolio.

“I would say that investments are a key part of our financial strength... We've consistently outperformed the industry in terms of returns year over year, and it's one of the main reasons that PALIG 'punches above its weight' as an organization.”

Pan-American has focused on long-term, high-quality bonds, which make up more than 78% of its total invested assets, according to the credit report. More than 40% of the portfolio is in well-diversified private placement issues.

Revuelta says it started with effective credit analysis and portfolio monitoring. He patiently sought relative value in the new-issue and secondary markets, jumped on market dislocations and avoided “toxic assets.”

PALIG had no exposure to subprime mortgage-backed loans or collateralized debt obligations when the crisis hit, he said. And when other insurers were forced to invest defensively, Revuelta was on the hunt for bargains.

And he found quite a few during the crisis.

For instance, he bought corporate bonds in early 2009 that “were trading like dirt at huge spreads,” he said. Pan-American still holds a Valero bond with a coupon of 10.5%, bought in March 2009 at a spread of 687 basis points.

“We have this low, flat yield curve that's existed over the last decade, and investment income has been impacted throughout the life industry,” Friedman said. “You've seen some companies stretch for higher yield either through taking greater credit risk or longer duration.

“Rudy has not dipped into lower credit classes or extended duration. The book yield that we've been able to achieve while keeping a very high-credit quality has been just outstanding.”

Friedman said he shares a similar investment philosophy. The goal is “a rock-solid credit portfolio that at that margin, when we find either growth opportunities or dislocation, then we can act,” he said.

Pan-American relies on its own sophisticated data analytics to conduct credit and sensitivity analyses, not external advisers, he added.

Despite a strong U.S. economy, Friedman remains vigilant. Many have predicted a shallow recession in the next 12 to 18 months, with the economic cycle in its late stages.

Pan-American is reviewing its assets and has reduced the average life of its bond portfolio to about 10 years and its duration to less than eight.

“We tend to see things coming that we want to be smart about and reposition the portfolio,” Friedman said, “and have a little dry powder so that if the markets dislocate, we'll have the opportunity to take advantage of that.”

Risk and reward. A circuitous journey coming full circle. It's been a worthwhile ride, Friedman says, a quarter-century after making his bargain.

“I'm fascinated by the insurance industry not just because big data gives insight into the business and consumer behavior today in a way that would not have been possible 10 years ago,” Friedman said.

“I am also a real believer in the industry serving the greater good. As a mutual holding company and as a life insurer, Pan-American really has the ability to show up during people's greatest financial stress or difficulty, and we can do well by doing good. To be able to come to work every day and know we're doing this for a good reason—that gets me up in the morning.”


Learn More

Pan-American Life Insurance Group (A.M. Best # 052015)

For ratings and other financial strength information visit


Jeff Roberts is a senior associate editor. He can be reached at

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