General Electric Company is exploring opportunities to sell its asset management unit to a leading investment management firm. GE Asset Management had $115 billion in assets under management (AUM) as of June 30, 2015.
GE is looking for buyers that have considerable experience in managing retirement plan assets, scale, and broad distribution capabilities to support the continued growth of the third-party client base of its asset management unit.
GE to appoint independent fiduciary to review the transactions
According to GE, it will appoint an independent fiduciary to review the transaction. The independent fiduciary will approve the asset manager that will be engaged to manage the assets related to the company’s benefits plans (including GE pension plan) currently managed by its asset management unit.
GE will keep its responsibilities as plan sponsor and fiduciary for the plans after the sale of its asset management unit. The company said it will deposit the net proceeds from the sale into the GE Pension Trust.
Premier investment firms are interested in buying GE Asset Management
In a statement, GE Chairman and CEO Jeff Immelt said the company’s asset management unit has “world-class investment capabilities and an experienced, talented team.” According to him, the company received significant interests from premier investment firms to buy GE Asset Management (GEAM).
Immelt added, “As we continue to transform GE to focus on our industrial core, now is the right time to explore such a sale.”
On the other hand, GEAM Chairman, President and CEO Dmitri Stockton said the business “offers a unique value proposition to potential buyers.”
He also emphasized that it is well positioned for 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.”
Furthermore, Stockton pointed out that combining GEAM with another leading asset manager with scale and expanded distribution will strengthen its ability to boost client relationships.
Moreover, he believes that the deal would also “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.”