Lockheed Pension Manager Considering Exit from $600M In PE Investments

Nov 4 2015 | 8:39pm ET

Defense behemoth Lockheed Martin is considering the sale of $600 million in alternative assets in order to reduce its exposure to private equity funds.

The assets are reportedly housed at Lockheed Martin Investment Management Co., the unit responsible for managing the company’s retirement plans, according to a Pensions and Investments article citing unidentified individuals familiar with the matter. 

Lockheed is the world’s largest defense contractor and maker of the F-35 Joint Strike Fighter. It recently acquired helicopter maker Sikorsky from United Technologies in a $9 billion deal expected to close on Friday. However, not everyone is impressed; Standard & Poors downgraded the company’s debt rating earlier this week on concerns credit metrics will deteriorate as Lockheed continues to return cash to shareholders while incurring debt to finance the Sikorsky acquisition. 

The investment management division was founded in 1997 and has more than $41 billion in assets under management, of which approximately $4.3 billion was deployed to alternative assets and $2.9 billion in private equity funds as of the end of last year. The company is working with an advisor, P&I noted, and may close on the alternative asset dispositions by the end of the year.

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