GE to exit private equity

General Equity has been told by its parent to not make any new investments and manage down its $3bn private portfolio of direct and fund investments.

GE Equity, the private equity investment arm of General Electric, has become the latest captive private equity investment operation to have lost the support of its parent company, as the conglomerates progresses the restructuring of its financial arm.

 

According to a spokesman, GE Equity has been told to stop all origination efforts and to not make any new investments. Instead the division is to “manage down” its portfolio of direct investments and limited partnership interests in private equity and venture capital funds of funds.

 

A number of GE Equity’s 135 employees have already been made redundant, with the rest of the staff staying on to oversee the winding down process and the sale of individual investments, none of which make up more than three per cent of the group’s portfolio.

 

The spokesman would not be drawn on whether GE had a preferred method of exiting its private equity investments. He said portfolio companies that were “tracking” GE’s other businesses might be incorporated in relevant divisions, but would not comment on whether the company was at all inclined to use the secondary market to facilitate the exits. “We are looking to extract maximum value from the divestment process, which could take several years to complete”, he said.

 

According to PrivateEquityCentral.net (PEC), the website, General Electric has made capital commitments to several technology venture capital funds including Blue Chip Venture, Carlyle Europe Venture Partners, Quadrangle Group and Silverlake Partners, and is currently mulling the option of telling the general partners of these vehicles that it may not fund these commitments. GE has not defaulted on any of its limited partner interests yet, nor has it taken a decision to do so, PEC said today.