JPMorgan P.E. Services Lands $10B Client

Jan 8 2007 | 10:25am ET

JPMorgan Private Equity Fund Services has struck an agreement to provide fund services to the $10 billion HM Capital Partners funds. The deal, PEFS’ largest third-party agreement, boosts the group’s total committed capital to $35 billion in 190 funds.

As part of the outsourcing deal, HM’s five-member fund administration team will join PEFS, creating the group’s fourth U.S. office, with New York, Chicago and San Francisco already operating. According to Robert Caporale, head of PEFS, the division will also open offices in London and Sydney this year.

“We believe this partnership will allow us to take full advantage of JPMorgan’s deep experience, strong processes and technology, while maintaining a dedicated team familiar with HM Capital, its funds and its partners,” HM CFO Dave Knickel said. The enlarged PEFS will manage fund accounting, investor tracking, waterfall administration, tax support and financial reporting for HM.

“Outsourcing adoption rates are rising,” PEFS’ Caporale said. “Up to about a year ago, outsourcing adoption rates were about 15%; it’s clearly increasing as we’re seeing funds grow in size and private equity booming in general. The funds getting more complex and the technology investment that people need to make is increasing, and we’re seeing more interest in outsourcing.”

Dallas-based HM, the former Hicks, Muse, Tate & Fust, specializes in the food, media and energy sectors.

Caporale said that, while the Dallas office is focused on HM, the deal will serve as a springboard into a new, lucrative market.

“The Texas market, and the surrounding states, offer a lot of private equity opportunity,” he said. “After New York, Chicago and Boston, it’s the fourth-largest, and there are a number of names down there we are interested in.”

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