JPMorgan Asset Management (JPMAM) has agreed to sell its listed secondaries unit, JPMorgan Private Equity Limited (JPEL), to Fortress Investment Group (FIG).
New York-headquartered FIG’s credit business will take over the investment management contract and the management team at JPEL will move to FIG, according to a statement from JPMAM. The transaction is expected to take effect during the first quarter of 2016.
JPEL’s investment process and strategy will not change under the new management agreement, and the unit will continue to be headed by Troy Duncan and Greg Getschow.
London-listed JPEL acquires secondary portfolios of direct investments and significantly invested partnership investments across buyout, venture capital and special situations funds globally, according to its 2015 annual report. Over 40 percent of its portfolio was invested in assets acquired on the secondaries market, including more than 70 separate fund interests, as of 30 June.
JPEL, which was acquired by JPMorgan as part of its acquisition of Bear Stearns in 2008, seeks mature assets of an average age of 8.1 years with the potential for near-term exits, according to the annual report. The unit’s biggest investment is in Life Sciences Holdings SPV I Fund which represents almost 7 percent of JPEL’s $560.2 million private equity investments at $36.4 million as of 30 June.
Publicly traded FIG had $74.3 billion in assets under management as of 30 September, according to its website. The global firm invests across private equity, credit and real estate, liquid hedge funds and traditional asset management strategies.
There were several news reports in the autumn indicating that JPMorgan is also close to spinning off Highbridge Capital Management’s $22 billion private equity portfolio, in which the bank would keep a minority stake.
JPMorgan declined to comment on the broader spin-out.
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