General Electric Co. (NYSE: GE) is getting ever further along the path to being viewed as an industrial conglomerate rather than as a conglomerate with a huge bank, lending and financial services operations. Now comes news that GE has sold its own asset management unit to State Street Corp. (NYSE: STT) for up to $485 million.

While this will be viewed as just one more step along the path to an industrial focus, 24/7 Wall St. cannot help but wonder if GE is actually getting anywhere close to enough for the disposition. The outcome of this will of course depend on the total payments, and historic valuations for asset managers may no longer hold true in a financial world dominated by exchange traded funds (ETFs) and with near-zero interest rates.

State Street Global Advisors (SSGA) has roughly $2.3 trillion in assets under management globally. SSGA will now manage assets of the GE pension plan and that of other client assets included in the deal (if they transition).

There is no change to pension benefits received by GE pension plan participants as a result of this transaction. What stands out about the disposition is that GE said it will deposit the net sale proceeds from the transaction into the GE Pension Trust. In one manner, it could be argued that GE was just getting rid of the asset.

Is it possible that GE’s quest to divest itself of financial assets might be leading to discounted sale prices? That is something that likely will not be ultimately clear for years, or until the next expansion/recession cycle.

This deal is expected to increase SSGA’s assets under management by approximately $100 billion. Historically, asset management units have generated valuations of 1% of the assets under management. Another wild card in comparing this to past deal valuations is that most of the assets here are those of GE’s pension system.

GE’s Jeff Immelt said:

This sale is another example reflecting the attractiveness of GE’s financial services businesses in the marketplace. In addition, it presents a great opportunity for GE’s primary benefit plans to benefit from the world-class capabilities of SSGA. Most importantly, SSGA meets all the criteria GE originally established for the firm that would acquire GE Asset Management, including considerable experience managing retirement assets, investment and fiduciary expertise, a strong performance track record, and scale and distribution leadership.

Ron O’Hanley, president and chief executive officer of SSGA, said:

As defined benefit plans – both private and public – undergo change, GEAM’s skills coupled with SSGA’s existing capabilities will position us well to provide effective solutions and outcomes to these investors. 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. In addition, GEAM’s OCIO and Insurance platforms significantly strengthen our capabilities in these fast growing areas.

Again, it is very hard to generate comparisons to past asset management sales. GE shares were treating the news positively, with a gain of 1.4% to $31.93 in late morning trading on Wednesday.

GE’s consensus analyst price target is $32.69, and it has a 52-week range of $19.37 to $31.95 — with that high reached Wednesday morning.

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