- JPMorgan private-equity business has $22 billion in assets
- Bank said planning to sell fund to CEO Kapnick, other managers
JPMorgan Chase & Co., the largest U.S. bank, is close to selling a majority stake in Highbridge Capital Management LLC to the executives who run the $22 billion private-equity business, a person with direct knowledge of the matter said.
The deal, under discussion since at least 2014, is expected to be completed by year-end, said the person, who asked not to be identified because the matter isn’t public. Highbridge Chief Executive Officer Scott Kapnick and other members of management will own the bulk of the business while JPMorgan will retain a minority stake, the person said.
Big U.S. banks have been selling private-equity and hedge-fund assets following regulatory changes that restrict their ability to invest in such businesses. Highbridge represents a small part of New York-based JPMorgan’s alternative-asset holdings and the lender thinks it could grow faster as an independent unit, the person said.
JPMorgan bought a majority stake in Highbridge in 2004 for more than $1.3 billion and increased its ownership over the next five years. Highbridge deploys multiple investment strategies, including convertible bond arbitrage, credit, global macro, long-short equity and statistical arbitrage. It also runs traditional investment products.
Kapnick didn’t immediately return a call seeking comment. Robert Carosella, a JPMorgan spokesman, declined to comment.
JPMorgan will retain the firm’s $6 billion hedge-fund business, which will keep its Highbridge branding, the person said. The Wall Street Journal reported JPMorgan’s plans earlier Tuesday.