State Street to Acquire GE Asset Management

GE has agreed to sell its $115 billion asset management business to State Street Global Advisors.
Dmitri Stockton, GE Asset Management

Dmitri Stockton, GE Asset Management

Fairfield, Conn.—In a transaction potentially valued at up to $485 million, GE has agreed to sell its investment management arm, GE Asset Management, to a unit of State Street Corp., the two companies announced late last week.

State Street Global Advisors, which already has $2.3 trillion in assets under management worldwide, will manage assets of the GE pension plan currently managed by GEAM and also assume responsibility for management of GEAM’s third-party client base, subject to client consent.

The sale will increase SSGA’s assets under management (AUM) by about $100 billion. Net proceeds from the transaction will be deposited into the GE Pension Trust.

The news closely follows the announcement that GE Capital’s Franchise Finance business will be sold, effective in the second quarter. The U.S. business, which provides real estate financing to owners of limited-service hotel properties, will go to Western Alliance bank, and Franchise Finance’s Canadian business will be sold to an unidentified buyer.

GEAM is a wholly owned subsidiary of GE, separate from GE Capital, but for about 12 months GE has been pursuing a strategy of divesting its financial-services entities to focus on its industrial businesses.

“This transaction will allow our firm to bring its active and alternative asset management capabilities to an even broader investor base, and enhance SSGA’s ability to grow its presence in the pension plan outsourcing segment,” Dmitri Stockton, GEAM chairman, president & CEO, said in a prepared statement.

“GEAM will bring new alternatives capabilities in direct private equity and real estate to SSGA while enhancing our existing active fundamental equity, active fixed income and hedge fund teams,” added Ron O’Hanley, president & CEO of SSGA.

A GE spokesperson declined to provide any information about GEAM’s commercial real estate portfolio.

GE is being represented by Credit Suisse in this transaction, which is expected to close in the third quarter.