State Street to Acquire GE Asset Management

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 08:15 ET (12:15 GMT)

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