General Electric Co will invest more heavily in junk bonds, private equity and o...
NEW YORK - General Electric Co will invest more heavily in junk bonds, private equity and other high-yield investments to boost returns at its ailing insurance business, company executives said on Thursday.
Asked about increased risk, he said GE was still being prudent. “We’re starting from a point where we think is quite conservative and we expect to continue to maintain a portfolio that is quite conservative,” said Grandolfo, who was hired as GE’s first dedicated chief investment officer for insurance in October.
GE shocked investors when it took a surprise $6.2 billion after-tax charge last year and began setting aside $15 billion - one of the largest such amounts ever - to cover the policies that were underwritten more than a decade ago, when actuaries did not yet know how costly the claims would become. GE’s massive power-plant business is hemorrhaging cash and contending with falling sales and technical problems, while the company is selling assets to pay down its outsized debt.
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