General Electric Co. (GE:US)’s private-equity investment arm plans to explore the sale of about $1 billion in fund stakes as it seeks to comply with rules limiting risk-taking by banks, according to three people with knowledge of the matter.
GE Capital’s Americas equity unit, which is led by Patrick Kocsi, is interviewing firms to help advise it on a secondary sale, said the people, who asked not to be named because the information is private. The holdings are mostly U.S. middle-market buyout fund stakes, they said.
A number of finance companies have been selling assets and operations as they come under pressure from the Volcker rule, a provision of the 2010 Dodd-Frank Act that limits how much they can invest in private equity. The Volcker rule prohibits banks from investing more than 3 percent of Tier 1 capital in private-equity or hedge funds, or owning more than 3 percent of a fund. Citigroup Inc. also may sell about $1 billion in holdings managed by its former private-equity business, five people familiar with the matter said earlier this month.
Russell Wilkerson, a GE Capital spokesman, declined to comment on a possible sale.
The GE Capital unit, which is based in Norwalk, Connecticut, manages about $2.5 billion of middle-market investments and funds, according to its website. The team, which has 25 investment professionals, directs $150 million to $200 million a year to co-investments and growth-oriented deals in medium-size companies, the website shows.
The group’s fund investment activities are led by Bruce Ingram.
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