(Reuters) - JPMorgan Chase & Co (JPM.N) said on Friday its private equity unit will become independent, the latest move by a financial institution to shed risky businesses amid financial reform.
As a first step toward separation from the bank, the unit, One Equity Partners, which manages $4.5 billion of investments, will raise its next investment fund externally rather than through JPMorgan.
One Equity Partners will continue to manage existing portfolio companies for the bank, including the travel technology firm Travelport TRVPT.UL and the healthcare firms M*Modal and Wright Medical Group (WMGI.O).
The private equity business has become less appealing to banks because of the 2010 Dodd-Frank financial reform law, which includes limits on banks’ investing their own money in such funds.
A JPMorgan Chase spokeswoman did not immediately return a call seeking comment.
JPMorgan shares were down 1.25 percent at $53.49 in morning trading on The New York Stock Exchange on Friday.
Reporting by Tanya Agrawal in Bangalore and Peter Rudegeair in New York; editing by John Wallace