JPMorgan Plans Private-Equity Spin-Off

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.


In Depth

Steinbrugge: Will Hedge Funds Help or Hurt During the Next Market Correction?

Sep 7 2016 | 11:55pm ET

Most investors have become accustomed to quick rebounds when markets correct, but...

Lifestyle

Quattrex Sports AG Debuts Soccer-Focused UCITS Fund

Sep 9 2016 | 9:54pm ET

Innovative alternative investment company Quattrex Sports has unveiled a new UCITS...

Guest Contributor

Malik: The Ever-Changing Middle Market and The Entering Class of 2016

Sep 2 2016 | 5:01pm ET

Deal sourcing and origination is only going to get more competitive given current...