High stakes move: to fulfill its enormous pension fund obligations, General Motors turns to riskier investments
Mall buyers are grumbling about an unusual marketing plan that broker AEW Capital Management has adopted for General Motors Pension Trust’s offering of 50% stakes in five Class-A malls. The package is expected to sell for about $550 million. Because the GM fund is concerned about who it will end up with as a partner, AEW is asking bidders to submit strategies for the properties –in effect, essays that outline management approaches, expansion and repositioning plans, and competitive advantages that the buyer would bring to the table. Prospective bidders have called the step time consuming and are worried that they will end up giving free advice to the GM fund. The submissions are due this week.
Consider the following: The bond market is at historic lows; the stock market has failed to fully recover from the dot-com bust and continues to be choppy; six-month Treasury bills are yielding just 1.73 percent; and six-month certificates of deposit 1.32 percent. So how does Reed expect to pull it off?