State Street to Acquire GE Asset Management -- Update
March 30 2016 - 8:29AM
Dow Jones News
By Sarah Krouse and Anne Steele
State Street Corp. has agreed to buy General Electric Co.'s
asset management unit for up to $485 million as the Boston-based
firm works to add scale to its money-management division.
The business, which includes GE's U.S. benefits plans as well as
assets for third-party institutional client, manages more than $100
billion in assets. The cash deal will give State Street Global
Advisors, known for its index-tracking funds, a broader mix of
money management abilities including private-equity and real-estate
investments.
The deal comes as GE continues to make strides to exit the
financial business by shedding assets of GE Capital. Since
announcing its dismantling plan last April, GE has signed some $161
billion in deals.
State Street's money management business had $2.2 trillion in
assets at the end of 2015 and includes a large lineup of ETFs,
funds run by human stock and bond pickers and hedge-funds. The deal
is poised to help State Street grow in the business of managing
money for insurers and defined-benefit plans that outsource
portfolio management.
Ron O'Hanley, chief executive officer of SSGA, who was
previously head of Fidelity's asset management business, joined the
firm early last year and has said he plans to grow the business in
part through mergers and acquisition activity. At an investor day
in February, he said retirement plan outsourcing,
defined-contribution plans in which employees set aside money for
retirement, ETFs and factor-based investing were among the areas of
the business he aimed to grow.
The company said it expects the GE asset management deal to
generate up to $300 million in revenue from the deal in the 12
months following its completion. The deal is expected to close in
the third quarter.
Write to Sarah Krouse at sarah.krouse@wsj.com and Anne Steele at
Anne.Steele@wsj.com
(END) Dow Jones Newswires
March 30, 2016 08:14 ET (12:14 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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