Nelson Peltz's Trian Fund Management said it had bought $2.5 billion in General Electric shares since May, making it one of the company's top 10 shareholders.
With a beneficial ownership of 98.5 million GE shares, the company is now Trian's largest investment, the activist-investor firm said in a statement on Monday.
Trian, which now has a roughly 1% stake in GE, has not asked GE for a board seat, but it has called for GE to step up cost cuts, consider getting rid of even more of its finance arm, and be more cautious on acquisitions.
"Trian believes GE has significant long-term potential and that its implied target value per share, including dividends, could be $40 to $45 by the end of 2017 based on our view that GE can deliver EPS of at least $2.20 in 2018," Ed Garden, chief investment officer of Trian, said.
GE shares closed at $25.47 on Friday on the New York Stock Exchange.
The US conglomerate said in April it would seek to sell some $200 billion of its GE Capital assets as it moves away from financial services and focuses more on manufacturing jet engines, power turbines, and other big-ticket industrial equipment.
Over the past couple of years, Peltz has targeted DuPont and PepsiCo Inc. among others, demanding board seats and asking them to separate their fast-growing businesses from the ones where growth had stagnated.
Before the wave of activist campaigns during the past few years, companies often resisted the approach of activist hedge funds, thwarting their efforts to shake up management or restructure their businesses. But the growing cash piles and clout amassed by activists have granted them more board access.
Here's a statement from GE:
We welcome Trian's significant investment in the Company. GE maintains an open dialogue with our shareholders and enjoys productive, collaborative relationships with them. I have known Trian Principals Nelson Peltz and Ed Garden for many years. Trian has a strong track record of working with companies to build long-term shareholder value, and has been an engaged shareholder. We appreciate their perspectives and look forward to a constructive ongoing dialogue with Trian as we execute our strategy to reshape the Company.
GE is focused on improving margins and returns, reducing costs and the size of corporate, returning capital to shareholders and realigning our portfolio, most recently with the announced exit of most of GE Capital. Significantly, we have a plan to return more than $90 billion to investors through 2018 and are on track to complete our goal of closing $100 billion of GE Capital asset sales in 2015. We are transforming GE into a focused infrastructure and technology company, leading the intersection of the physical and analytical worlds.
Our businesses are performing well in a volatile environment. In the second-quarter earnings announcement, GE raised its full-year Industrial operating earnings per share guidance to $1.13-1.20 and is on track for that goal.  We are confident our strategy will further enhance shareholder value and continue to position GE for long-term growth and success.
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