Monday, 28 July 2014
Last updated 2 days ago
Jun 17 2013 | 2:40pm ET
JPMorgan Chase will spin off its internal private-equity unit, which manages some $4.5 billion of the bank's capital.
One Equity Partners, which until now has managed JPMorgan's money exclusively, will raise a new fund entirely from outside investors and will separate from the bank. One Equity will continue to manage the roughly 30 investments it currently has for JPMorgan.
The bank is shedding the unit due to recent uneven returns and a desire to focus on its core businesses. The spin-off has nothing to do with the Volcker Rule, which severely restricts banks' hedge fund and private-equity activities; because One Equity manages only JPMorgan's money, it could hold on to the unit under merchant-banking regulations.
"I am confident they will continue to be extremely successful," JPMorgan CEO James Dimon said in a statement.
JPMorgan acquired One Equity in 2004 when it bought Bank One Corp., deciding to hold onto it rather than its own private-equity business. But One Equity has lost money in four out of the last eight quarters, including a $182 million net loss in the first quarter.
Bank One set up One Equity in 2001 under Dick Cashen. Cashen, formerly president of Citigroup Venture Capital, is reportedly close to Dimon.
One Equity usually invests between $50 million and $250 million per transaction. It has nine offices around the world.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…