JPMorgan Chase is spinning off its private equity arm, One Equity Partners (OEP), as the largest US bank increases its focus on client businesses.
One Equity Partners currently manages approximately US$4.5 billion of investments for JPMorgan Chase in direct private equity transactions and has produced strong returns over the last 12 years.
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The unit will still make direct investments on behalf of JPMorgan for an ‘interim period’ and continue to manage the bank’s existing group of portfolio companies, JPMorgan said in a statement.
Jamie Dimon, chairman and CEO of JPMorgan Chase, said: "I have worked with the team at OEP for the past 12 years and have a lot of respect for all that they have accomplished and the great value they have delivered to the firm. Going forward, I am confident they will continue to be extremely successful."
JP Morgan inherited One Equity as part of its 2004 acquisition of Bank One. Several months later, JP Morgan decided to keep One Equity and spin out its own private-equity business, which was funded by the bank and outside investors.
The private equity business has become less appealing in general to banks because of the 2010 Dodd-Frank financial reform law, which includes limits on banks’ investing their own money in such funds.
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By GlobalData
