Sankaty scoops up GE leasing assets down under

The Bain Capital affiliate picked up the portfolios at a discount, according to local media reports. The sale marks GE Capital’s exit from Australia and New Zealand.

GE Capital has sold its commercial lending and leasing portfolios to Sankaty Advisors, the credit arm of Bain Capital, for a reported A$1.9 billion ($1.3 billion; €1.25 billion). 

The sale represented about $1.7 billion, or A$2.4 billion, of ending net investment for GE Capital, the firm said, although financial terms of the deal were not disclosed. The deal is expected to complete before the end of the year. 

The transaction closes out GE Capital’s sale of assets in Australia and New Zealand. The US-based financial arm of General Electric has already sold three other consumer and commercial financing businesses and expects all four sales to reach a final close by March 2016, the firm said. In total, the sales represent around $9 billion of ending net investment for the conglomerate. 

Deutsche Bank advised Sankaty and partially financed the deal, GE Capital said. 

General Electric announced in April that it planned to divest the vast bulk of its financial unit, GE Capital, in a bid to rid itself of the global systemically important financial institution (G-SIFI) label that its outsized financial business earned it last year. Designation as a G-SIFI pushed up the cost of doing business and convinced GE chief Jeff Inmelt to reorientate GE back towards its industrial base and slim down its financial business. 

Morgan Stanley acted as financial advisor to GE while King & Wood Mallesons and Minter Ellison provided legal advice.

Credit specialist Sankaty Advisors is headquartered in Boston and has around $29.5 billion in assets under management.