The Financial Times reported that
JPMorgan Chase & Co.
) is divesting another non-core business with the aim to
streamline its operations. The company is to sell its Asia-based
investment unit, Global Special Opportunities Group.
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Based in Hong Kong, Global Special Opportunities Group has nearly
$2 billion in assets and it invests in distressed debt,
nonperforming asset and private equity. The unit has 35 employees
and is headed by Chris Nicholas.
JPMorgan is seeking bids from private equity firms and
credit-focused hedge funds for Global Special Opportunities Group
with a sale price of roughly $1 billion. Among the potential
The Blackstone Group L.P.
The Carlyle Group LP
Kohlberg Kravis Roberts & Co. L.P.
However, JPMorgan's decision to vend Global Special Opportunities
Group is not due to the recently approved Volcker Rule. The
unit's nature of business does not clash with the provisions of
the Volcker Rule, which prohibits proprietary trading.
This year, JPMorgan has taken several decisions that have helped
it to concentrate on core operations. Apart from vending its
above-mentioned unit, the company decided to move away from the
physical trading commodity and student loan businesses. Further,
the company announced divestiture of One Equity Partners, its
private-equity unit and decided not to take any new business from
foreign correspondent banks.
All these will likely help JPMorgan to simplify its operations,
comply with the new regulations and meet the strict capital
requirements. Additionally, the company will be able to post more
robust results by focusing on core operations.
Currently, JPMorgan carries a Zacks Rank #4 (Sell).