GE to Explore Sale of GE Asset Management to Another Leading Investment Management Firm
By Business Wire News
By Business Wire News
GE [NYSE:GE] today announced it will explore opportunities to sell GE Asset Management (GEAM) – the Company’s asset management arm – to another leading investment management firm. GE will seek buyers that possess considerable experience managing retirement plan assets, as well as scale and broad distribution capabilities to support continued growth of GEAM’s third-party client base.
An independent fiduciary will be appointed to review the transaction. The independent fiduciary will approve the asset manager that will be engaged to manage the assets related to GE’s primary benefit plans currently managed by GEAM, including the GE pension plan. GE will retain responsibilities as plan sponsor and fiduciary for these plans following the sale. Net sale proceeds from the transaction will be deposited into the GE Pension Trust, increasing trust assets used to pay GE pension plan benefits.
As part of the transaction, the buyer will separately assume responsibility for the management of GEAM’s third-party client asset base, subject to client consents.
“GE Asset Management has world-class investment capabilities and an experienced, talented team that has done a terrific job managing assets for benefit plans serving GE employees and retirees, as well as other investors,” said GE Chairman and CEO Jeff Immelt. “Over time, there has been significant interest from premier investment firms in acquiring GEAM, reflecting its reputation and attractiveness to others in the asset management industry. As we continue to transform GE to focus on our industrial core, now is the right time to explore such a sale.”
Dmitri Stockton, Chairman, President and CEO of GEAM, said, “GE Asset Management offers a unique value proposition to potential buyers as one of the few in-house managers of company benefit plan assets that has also built a robust external client base. Our firm is well positioned for continued growth, with valuable expertise in areas including outsourced CIO/total plan management, active management, alternative assets, asset allocation, manager selection, risk management, and fiduciary governance. By combining our business with that of another leading asset manager with scale and expanded distribution, we will strengthen our ability to build enhanced client relationships. In addition, this deal will create an opportunity to set a new standard for outsourced CIO management of benefit plan assets, while also providing GE with even more investment choices.”
It is anticipated that the buyer will acquire both GEAM’s assets and team, with the exception of a small number of GEAM employees who will remain with GE to provide investment oversight of GE’s primary benefit plans.
Throughout this process, GEAM will maintain its commitment to fulfilling all of its obligations to its clients. GEAM expects no impact to its ability to provide strong investment performance and service to investors going forward.
The potential sale will not change the benefits received by participants in the GE pension plan (or any affiliate pension plan), and does not change GE’s requirement to meet its pension funding obligations.
GE will be represented in the transaction by Credit Suisse. The deal is subject to any and all customary and regulatory approvals.
GEAM is a wholly owned subsidiary of GE, separate from GE Capital.
About GE Asset Management
A wholly owned subsidiary of GE, GE Asset Management Incorporated (GEAM) is a global asset manager with $115 billion in assets under management (as of June 30, 2015). GEAM and its predecessor organizations have been managing investments for GE’s U.S. pension and other benefit plans for over 80 years. Today GEAM manages portfolios for global clients in all major asset classes, including U.S. and international equities, fixed income and alternative assets. Client assets are invested side-by-side with the corresponding GE benefit plan portfolios and managed by the same investment professionals, aligning GEAM’s interests with those of its clients.
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