JP Morgan Chase's sale of private equity arm stalls

NEW YORK, March 8 Sat Mar 8, 2014 1:31pm EST

A sign outside the headquarters of JP Morgan Chase & Co in New York, September 19, 2013. REUTERS/Mike Segar

A sign outside the headquarters of JP Morgan Chase & Co in New York, September 19, 2013.

Credit: Reuters/Mike Segar

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NEW YORK, March 8 (Reuters-peHUB) - The auction of JP Morgan Chase's private equity business, One Equity Partners, in the market since at least November, has hit an impasse, according to three people with knowledge of the situation.

Two people close to potential buyers said the bank "pulled" the business off the market. Another source, active in the secondary market but not directly involved with the process, described the auction as stalled after the bank increased its asking price.

"The bid/ask spread has widened dramatically," the secondary professional said. "It's hard to imagine someone stretching to that level. There's a lot of disappointed buyers."

Sources said the bank could revive an auction of One Equity at any time. "The question is, do they try and come back six months from now, or never?" one source said.

A spokesperson for JP Morgan Chase declined to comment.

The bank announced last July it was spinning off One Equity, its last remaining private equity operation, because the unit was not core. JP Morgan Chase was not under regulatory pressure to sell: One Equity would not be affected by the Dodd-Frank financial reform law, which restricts the ability of bank holding companies to own and operate private equity groups, sister news service Reuters reported last year.

Potential buyers were bidding for a portfolio of buyout and growth equity investments valued at more than $4 billion, according to sources. The winning bidder was also expected to contribute to a new fund the team would raise as an independent firm.

As part of the deal, One Equity, which has been investing off the bank's balance sheet, wanted $1.5 billion to $2 billion in funding for new deals, Dow Jones reported in November.

Without a deal in place, One Equity team would likely have to move forward without any new capital from the bank. One Equity is drawing from "outstanding capital commitments" from the bank until starting its next fund, which would be raised from external investors, according to One Equity's website.

The group is led by Dick Cashin, who founded the group in 2001. Since then, One Equity has managed $14 billion in total investments and committed capital for JP Morgan Chase.

The bank has shed its other private equity groups over the years. JP Morgan Partners spun out into independent firm CCMP Capital Partners, and Corsair Capital, which the bank formed in 1993 to invest into opportunities created by the savings and loan crisis, spun out in 2006.

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Comments (1)
AnnaMB wrote:
Russia will never make it to Kiev ” belonged ” to the West .
Arayik Sargsyan , academician,
President of the Academy of Geopolitics , Honorary Consul of Macedonia to Armenia.
And on December 16th will be negotiations with the IMF . This is primarily geopolitical negotiations , then it talks – financial or economic . December 16th will be talks with the IMF about whether they will allocate $ 11.4 billion Ukraine that she needed the air . But if the 16th in the evening it turns out that the IMF does not give the money , I think that Yanukovich will do what he is told in the Kremlin. Because otherwise the country bankrupt.
On December 17, Yanukovych meets with Putin . Putin promised to help . “Gazprom” is in talks with a member of the “family” Yanukovych – Mr. Kurchenko – the signing of cheap Russian gas.
We return to Yanukovych . For three years he had repeatedly betrayed Russia and Putin personally , friends, comrades. He ” clave ” The EU and the U.S. – it is not for the sake of Russia, and , again, for my own sake – Yanukovych. Will or will not Yanukovych RF conditions – it is , in principle, no one cares . Earlier Russian talked about trade barriers . Now about geopolitics .
Question resolved in Ukraine . U.S. and EU ” twist ” movie. They are not profitable or Maidan nor fall Yanukovych. They are not ready to disintegration of Ukraine until 2015 . RF – this game understands them . Therefore, no sanctions will be against Ukraine and Yanukovych personally . They need it like air for another year. Then, under the guarantee of its security, he will give them to Ukraine. That’s the whole geopolitical scenario .
RF will never make it to Kiev ” belonged ” to the West .
The result: thanks to the Maidan , in the RF population increased patriotic feelings ! Here is the result of Western , and especially – the Polish and Swedish “strategists” . A charming Ms. Victoria Nuland ( assistant Secretary of State Depa USA) kept feeding carrot – for 100 million dollars , Ukrainians, as pigeons in the State Department building . The United States does not have a whip more ?
Arayik Sarkissian , academician,
President of the Academy of Geopolitics , Honorary Consul of Macedonia to Armenia.

Mar 09, 2014 1:35am EST  --  Report as abuse
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