New Soros Fund and GE Capital to Invest in Electric Power Plants

GE Capital Corp. and the fund group headed by George Soros, the Wall Street billionaire and philanthropist, are joining forces to invest in electric power plants in developing countries, the two sides announced Monday.

The new Global Power Investments will raise at least $2.5 billion and invest it in building or running privately owned power plants, the partners said. The fund will initially focus on Mexico and Asia, particularly China, India and Indonesia.

“With the rapid economic growth of numerous emerging markets around the world, this is an opportune time to invest in electrical power generating plants and to help facilitate their construction,” said Gary Wendt, chairman of GE Capital, in a statement.

Both GE Capital and Quantum Industrial Holdings, a new fund that will be managed by Soros Fund Management, will put up $200 million for the new fund.

The International Finance Corporation, the private financing arm of the World Bank, has signed a letter of intent to add $50 million to the new venture. The rest of the money will be raised from other investors.

GE Capital has $4.5 billion in investments in electric power projects, most in the United States and Canada.

Everett J. Santos, a director with the International Finance Corp., said, “Foreign private investment is important for the growth of the power sector in developing countries. The demand for electricity can no longer be satisfied through financing from public sector sources or multilateral lending agencies.”

While Soros is deeply involved in humanitarian efforts and projects supporting democracy in Eastern Europe, his new fund will be aimed at making profits for investors.

Soros’ six investment funds have net assets of $12 billion and invest in stocks, bonds, currencies, commodities and real estate. He is considered the highest-paid person on Wall Street, earning at least $650 million in 1992 from his fees and his stake in his investment funds, according to Financial World magazine.

Published reports have said Soros’ flagship Quantum fund earned a 65% to 70% return for investors last year. A spokesman for the company would not provide exact figures but said those numbers were in the correct range.

The new Soros fund plans to raise up to $1.4 billion from investors in four of its other funds. It may invest in other electric power generation projects in addition to Global Power Investments.

Like Soros’ other funds, the new fund will be off-shore, closed to U.S. citizens.

GE Capital is a subsidiary of General Electric Co., based in Stamford, Conn.