June 11, 2009 / 2:43 PM / 10 years ago

JPMorgan buys rest of Highbridge

NEW YORK (Reuters) - JPMorgan Chase & Co (JPM.N) on Thursday said Highbridge Capital Management LLC co-founder Henry Swieca plans to leave by year end as the big bank completes its takeover of the hedge fund giant.

JPMorgan, which originally bought a 55 percent stake in Highbridge in 2004 for $1.3 billion, has been increasing its ownership over the past five years. In the latest move, it will raise its stake from 77.5 percent for undisclosed terms.

JPMorgan did not return calls seeking comment.

Swieca and Glenn Dubin, Highbridge chief executive and co-founder, will retain small stakes in the firm. At the time of the deal, both executives agreed to stay on for five years.

Swieca is leaving to pursue “other opportunities” in financial services after a transition period ending late this year, the firm said. The departure will end his 17 years at Highbridge and a 25-year partnership with Dubin, a childhood friend.

The big bank’s alliance with Highbridge has been one of the most successful in the hedge fund industry, as the New York-based unit remained independent and key personnel stayed with the firm. Dubin, JPMorgan noted, will continue in his CEO role.

The firm’s assets under management have tripled over the past five years to $21 billion, while employment more than doubled to 310 people.

The firm has expanded into new markets and regions of the world to make Highbridge one of the world’s largest hedge fund managers. The unit also has built up a traditional asset management business and launched a business of making principal investments.

The fund, like others in the industry, posted poor performance last year and suffered a wave of redemptions. Assets under management plunged by more than half last year from $44.7 billion to $17 billion.

Highbridge’s flagship fund fell 25 percent in 2008, and the firm stopped clients from withdrawing all their cash. The firm has rebounded in the first half this year, as the main fund has climbed 17 percent through May and total assets surged to $21 billion.

Reporting by Joseph A. Giannone; Editing by Brian Moss

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