JPMorgan to Sell $1.3 Billion of Assets to Sankaty Advisors

Jul 27, 2014 11:45 pm ET

(Updates with history of offer in sixth paragraph.)

July 28 (Bloomberg) -- JPMorgan Chase & Co. agreed to sell about $1.3 billion of loans and securities to Sankaty Advisors LLC as the largest U.S. bank pares back non-essential holdings.

The unit of Bain Capital LLC will acquire the assets from JPMorgan’s Global Special Opportunities Group, the companies said in a statement today. The transaction, which will probably close by the end of the year, won’t have a material impact on the New York-based bank’s earnings, according to the statement.

Wall Street firms are unloading assets to comply with regulations requiring that they bolster capital and reduce investments made with their own money. JPMorgan Chief Executive Officer Jamie Dimon said in December that he’s “pruning” businesses that the bank doesn’t need.

The portfolio contains mezzanine loans in North America and Europe, as well as loans and related “special situations” investments in Australia and across Asia valued at about $1.3 billion in total, the companies said in today’s statement.

The unit, which is based in Hong Kong, employed 35 people mostly in Asia and was run by Chris Nicholas for JPMorgan, the biggest U.S. lender. It invested the bank’s money in distressed debt, non-performing loans and private equity.

The firm began offering the unit to potential buyers late last year, a person familiar with the matter said in December. Shares of JPMorgan closed 0.3 percent lower at $59.01 on July 25 and have gained 0.9 percent this year.

JPMorgan is in advanced talks with Lexington Partners and Carlyle Group LP’s AlpInvest Partners unit to sell half of about $4.5 billion in assets that its One Equity Partners buyout arm manages for the bank, the Wall Street Journal said this month.

In March, JPMorgan announced a deal to sell its physical commodities unit amid pressure from regulators for banks to leave the business of owning and storing raw materials.