General Electric Co., Fairfield, Conn., makes light bulbs. It also is a global financial services company. And it is very active amid the current global fiscal turbulence.
''We tend to do better when things are in turmoil,'' said Michael Pralle, president of GE Capital's Equity Capital Group, which invests in companies worldwide whose products or services make a strategic fit with one of GE's companies.Mr. Pralle manages a portfolio of $1.5 billion invested in 134 companies. Previously, he served as president of GE Capital Asia Pacific, where he supervised investment activities in 15 countries.
''As a result of the Asian financial crisis, there is more value in Asia,'' he said.
''We invested in a semiconductor packaging company in Indonesia at two times cash flow,'' he said. ''Of course, we bought political risk insurance from AIG,'' he added, referring to the American International Group.
In Thailand, GE Capital's Equity Capital Group purchased an auto loan company for 45 cents on the dollar, Mr. Pralle said.
Asia is opening up to foreign investors, he said. ''People (in the region) used to look at their business as a first-born son,'' he noted.
GE Capital's ECG typically takes a minority position when it invests in a supplier. ECG was founded in 1995 to enable GE to expand into new markets through investments in leading-edge products and services.
It invested $750 million in private equity, direct and indirect financial investments and co-investments in 1998 and plans to invest $1 billion a year in the future, Mr. Pralle said.
The majority of ECG's investments are in ''strategic equity,'' designed to benefit ECG and its customers through innovative business partnerships and synergies.
''Strategic equity investing creates a win-win opportunity for the group and its customers,'' Mr. Pralle said.
Such investments allow ECG's customers to capitalize on GE's worldwide presence, financial resources and experience with a wide range of businesses and products. GE, in turn, is able to enter new markets and industries by investing in growth companies with sales of more than $20 million.
In many cases, GE becomes the largest customer by far for ECG's customers by purchasing or distributing their products and services worldwide.
ECG typically invests from $5 million to $50 million for a minority interest of 10 percent to 49 percent in its customers - with an average of $20 million a deal.
''We look for companies with a good product,'' Mr. Pralle said. ''We give them revenue directly if they produce a component for one of our products.''
In many cases, GE becomes the largest customer by far for the companies in which ECG invests.
As an example, ECG recently purchased a stake in R2 Technologies, a software company with a digital-imaging mammography product with highly increased accuracy. The product is now sold by GE's medical sales force.
Between 50 percent and 75 percent of ECG's investments are in strategic equity.
The group sees opportunities in Japan, Mr. Pralle said. ''The banks in Japan don't have money to lend to midsize companies,'' he said. ''Many of these companies are willing to consider investment from a foreign company or spinning off non-core businesses.''
In China, it is hard to identify the right businesses, ''and the government is always changing its mind,'' Mr. Pralle said.
He heads a staff of five managing directors who specialize in financial and strategic investments in a wide range of industries.