State Street is to acquire GE Asset Management (GEAM) in a $485m (€645m) cash deal set to boost State Street Global Advisors (SSgA) assets under management by $100bn.
Announcing the deal, State Street said the move would boost SSgA’s alternatives capabilities, noting GEAM’s experience in direct private equity and property.
Jay Hooley, chief executive at State Street, said GEAM was a “very high-quality organisation” closely aligned with his company’s goals.
“It is also reflective of our desire to allocate capital to higher growth and return businesses,” Hooley added.
Ron O’Hanley, Hooley’s counterpart at the $2.4trn SSgA, highlighted several areas where GEAM’s experience would aid his company in new areas.
“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,” he said.
O’Hanley added that GEAM’s outsourced CIO activities would “significantly strengthen” SSgA’s hand in what it regarded a rapidly growing area.
SSgA said it expected to retain 90% of GEAM’s client assets, which it said were largely managed on behalf of US defined benefit funds.
It added that the transaction was expected to complete by the third quarter of the year.