Lexington, AlpInvest back JPMorgan One Equity spin-out

In a long-awaited deal, the secondaries pair has purchased half of the bank's One Equity-related investments and is expected to seed the former JPMorgan captive's next private equity fund.

Lexington Partners and AlpInvest Partners have agreed to acquire JPMorgan Chase’s interests in 50 percent of the portfolio companies managed by bank’s private equity unit, One Equity Partners, according to a statement.

The One Equity professionals will form an independent firm named OEP Capital Advisors, which will manage the portfolio now owned by the secondaries firms and JPMorgan. The portfolio was valued at $4.5 billion as of June 2013.

Terms of the transaction weren’t disclosed, but Lexington was said to be close to paying a 20 percent premium to NAV for the deal, Secondaries Investor reported in May. At the time, the deal was said to be worth more than $2 billion, including a staple of up to $1 billion to seed a new One Equity fund. Recent media reports have suggested JPMorgan would not commit to future funds.

JPMorgan initially announced its plans to spin out One Equity in a June 2013 statement.

“The One Equity team has produced strong returns over the years, and we have been extremely pleased with their results,” JPMorgan chief operating officer Matt Zames said at the time. “They have helped grow some great companies. The time is right for them to seek new capital to strengthen their global strategy, as they continue to manage our existing portfolio to maximise value to the firm.”

The transaction is expected to complete by year-end.