[NEW YORK] JPMorgan Chase & Co is close to finalizing a deal to sell the majority of Highbridge Capital Management LLC's private equity business, the Wall Street Journal reported, citing people familiar with the matter.
The bank is working on a deal to give up control of the US$22 billion private equity business to Highbridge Chief Executive Scott Kapnick and others in his management team, the newspaper said on Tuesday. JPMorgan is expected to retain a minority share of the PE business and all of Highbridge's US$6 billion hedge fund business, the Journal said.
A major factor behind the decision was the private equity business team's desire to be free of the constraints of a large bank, the WSJ reported, adding that the deal could close by the end of this year.
JPMorgan declined to comment.
The bank had bought a majority stake in Highbridge in 2004 for US$1.3 billion and in 2009 completed its takeover of the hedge fund. Highbridge's US$22 billion of client assets in private equity investments accounts for less than 1 percent of the US$2.32 trillion held by JPMorgan's entire asset management business.
JPMorgan is under pressure from regulators to simplify its business and shed assets that require it to hold relatively large amounts of capital. In January it sold portions of its One Equity Partners private equity portfolio.