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GM pension fund to sell private equity assets to China – report

Published: July 19, 2012 | 7:49 am
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General Motor’s underfunded pension fund has found a buyer for its illiquid private equity assets – the Chinese government, which is willing to pay $1.5bm-$2bn, the Financial Times reported.

China, which holds close to $1.2 trillion (£770bn) in US treasuries, has been looking to capitalise on the liquidity concerns of assets managers such as pension funds amid financial market volatility by snapping up their assets.
GM’s pension plan owns stakes in some of the most high-profile private equity funds in the United States and Europe, including Carlyle Group, Blackstone Gand CVC Capital Partners, the FT reported.
The sale, which is uncompleted, would involve the transfer by GM adviser Performance Equity Management of stakes to the State Administration of Foreign Exchange (Safe), which manages China’s more than $3 trillion in foreign exchange reserves.
GM declined to comment, Lexington Partners did not respond to a request for comment and Safe could not immediately be reached for comment.
The FT quoted an investment adviser as saying the deal was discreet, even by private equity standards, because “there is clearly concern about selling US assets to China, especially in an election year”.

Private equity, in which Republican Presidential hopeful Mitt Romney spent two decades of his life, as well as US trade relations with China have emerged as hot political issues in this year’s campaign for the White House.


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