State Street will acquire GE Asset Management, GE’s investment management arm, for up to $485 million, subject to adjustments.

The sale, part of GE’s shift to focus on its industrial core, will bring GEAM’s capabilities to State Street Global Advisors, augmenting SSGA’s investment expertise in areas complementary to its existing capabilities, including active management, as well as in alternative assets and outsourced chief investment officer mandates. It is also expected to increase SSGA’s assets under management by approximately $100 billion, as it assumes responsibility to manage the assets related to GE’s primary benefit plans currently managed by GEAM.

The existing GEAM team is expected to join SSGA as part of this transaction, with the exception of a small number of GEAM employees who will stay with GE to provide investment oversight of GE’s primary benefit plans. In the hopes of providing a smooth transition for clients, the core investment and relationship management teams serving GE’s benefit plans and other clients will continue to do so as part of SSGA following the closing.

“This sale is another example reflecting the attractiveness of GE’s financial services businesses in the marketplace,” said Jeff Immelt, GE’s chairman and CEO. “In addition, it presents a great opportunity for GE’s primary benefit plans to benefit from the world-class capabilities of SSGA. Most importantly, SSGA meets all the criteria GE originally established for the firm that would acquire GE Asset Management, including considerable experience managing retirement assets, investment and fiduciary expertise, a strong performance track record, and scale and distribution leadership.”

“SSGA is another outstanding investment firm with an expanded distribution network and $2.3 trillion in assets under management,” said Dmitri Stockton, chairman, president and CEO of GEAM. “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.”

An independent fiduciary, Evercore Trust Company, reviewed the transaction and approved SSGA’s engagement to manage the assets related to the GE pension plan currently managed by GEAM. GE will retain responsibilities as plan sponsor and fiduciary for its plans going forward. Net sale proceeds from the transaction will be deposited into the GE Pension Trust, increasing trust assets used to pay GE pension plan benefits.
The sale, which is expected to close in Q3/16, 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 is being represented in this transaction by Credit Suisse.