JPMorgan to Sell 50% of Buyout Portfolio to AlpInvest, Lexington

Aug 11, 2014 4:43 pm ET

Aug. 11 (Bloomberg) -- JPMorgan Chase & Co., which last year said its private-equity unit would become independent, agreed to sell half of its $4.5 billion in buyout holdings to Carlyle Group LP’s AlpInvest Partners BV and Lexington Partners Inc.

Dealmakers at One Equity Partners LLC will form OEP Capital Advisors LP, an investment firm independent from New York-based JPMorgan, when the transaction is completed, which is expected by year-end, according to a statement today. OEP will manage the rest of the portfolio, JPMorgan said. Financial terms of the agreement weren’t disclosed.

Wall Street firms are unloading parts of their businesses as regulations require that they bolster capital and reduce investments made with their own money. JPMorgan, whose Chief Executive Officer Jamie Dimon said in December he’s “pruning” divisions the bank doesn’t need, last month agreed to sell about $1.3 billion of loans and securities to Bain Capital LLC’s Sankaty Advisors LLC.

The sale of One Equity Partners’ holdings isn’t expected to have a material impact on JPMorgan’s earnings, the company said in the statement.

Lexington, based in New York, raised $7 billion in 2011 for a fund to buy stakes in buyout funds, a practice known as secondary private-equity investing. AlpInvest, a Dutch manager of funds-of-funds and secondary stakes with $52 billion in assets under management, is a unit of Washington-based Carlyle, the second-largest manager of investment alternatives to stocks and bonds.