Trian Fund Management is now one of General Electric's biggest shareholders after the firm led by activist investor Nelson Peltz placed its largest bet to date, about $2.5 billion, as it positions itself to play a role in the transformation of the industrial conglomerate.
General Electric Co. has refocused on its industrial roots — making large, complicated equipment for other companies — and selling off its financial operations. That, in a large part, is due to stricter federal oversight by federal regulators in the wake of the financial crisis.
That push continued Monday with the $2.5 billion sale of GE's corporate aircraft financing unit to Global Jet Capital. The private company based in Boca Raton, Fla., will get a portfolio of loans and leases, more than 300 aircraft and a team of GE employees.
Trian acquired 98.5 million shares, or about 1% of the Fairfield, Conn., company. The fund's executives, Peltz and Ed Garden, have a longstanding relationship with General Electric CEO Jeff Immelt. Rather than seeking to force corporate changes from GE, it appeared the Trian investment was in support of Immelt's goals.
"GE is executing a bold transformation that will generate attractive stockholder returns in the years ahead as the company reshapes its portfolio," Trian said in a statement.
Trian, unlike with other major investments, has not asked GE for board representation.
In May, Dupont shareholders rejected a contentious campaign by Trian for seats on its board. The fund had sought more influence at DuPont, saying that the company was falling short of its potential. In June, Trian took a stake in the water and fluid-products systems company Pentair and pushed it to consider acquisitions.
Immelt, meanwhile, says GE is looking forward to constructive dialogue with Trian as it moves ahead with its transformation.