State Street has announced that it has agreed to acquire GE Asset Management (GEAM), a leading asset manager, from GE.
The transaction is expected to increase State Street Global Advisors’ assets under management by approximately $100bn upon closing and add new alternatives capabilities, while strengthening existing fundamental equity and active fixed income teams.
“This transaction reflects our view of GEAM as a very high-quality organisation with strong cultural alignment with SSGA. It is also reflective of our desire to allocate capital to higher growth and return businesses,” said Jay Hooley, chairman and chief executive officer of State Street Corporation. “We believe this will help accelerate our strategic plan to extend our capabilities in key areas for our clients.”
Under the agreement, State Street will acquire GEAM in a cash transaction with a total purchase price of up to $485m, subject to adjustments.
Pending regulatory approvals and other customary closing conditions, the transaction is expected to be finalised early in the third quarter of 2016.
“As defined benefit plans – both private and public – undergo change, GEAM’s skills coupled with SSGA’s existing capabilities will position us well to provide effective solutions and outcomes to these investors, ” commented Ron O’Hanley, president and chief executive officer of SSGA. “GEAM will bring new alternatives capabilities in direct private equity and real estate to SSGA while enhancing our existing active fundamental equity, active fixed income and hedge fund teams. In addition, GEAM’s OCIO and Insurance platforms significantly strengthen our capabilities in these fast growing areas.”
Dmitri Stockton, chairman, president and chief executive officer of GE Asset Management, added: “State Street’s acquisition of GEAM will combine the proven capabilities of two leading asset management firms with great track records and complementary investment offerings, and create a unique opportunity to expand these areas of our businesses together as we leverage each other’s considerable investment experience and expertise.”