In a drive to downsize its non-core businesses,
JPMorgan Chase & Co.
) has decided to vend its loans and securities portfolio, valued at
nearly $1.3 billion to Sankaty Advisors, the credit affiliate of
Boston-based Bain Capital LLC. The news was reported by
This divestiture of JPMorgan's Global Special Opportunities
Group (GSOG) portfolio is in line with the bank's strategy of
raising capital and lowering down investments made with their own
money so as to comply with the regulatory requirements.
Again, for Sankaty, which has been eyeing big commercial bank
portfolios for some time, this deal may prove out to be the right
strategy, complementing its existing product range.
The Global Special Opportunities Group portfolio comprises
mezzanine loans in North America and Europe, and securities in
Australia and Asia. The division, with headquarters in Hong Kong,
has attracted investment firms which are interested in bolstering
their presence in Asia.
Notably, many big financial investment managers such as The Carlyle
Group LP (
), Kohlberg Kravis Roberts & Co. (
) and The Blackstone Group L.P.'s (
) credit arm - GSO Capital Partners LP - had targeted the debt
portfolio of JPMorgan, but in vain. Sankaty, with $24.0 billion in
assets under management, eventually won out.
In recent times, JPMorgan has been streamlining its operations to
increase focus on core businesses. In July, the bank announced the
divestiture of its corporate dealing services business. Further in
April, the company sold its 401(k) record-keeping business and
Retirement Plan Services business to Great-West Financial.
Prior to that, in March, JPMorgan inked an agreement with Mercuria
Energy Group Limited for sale of its physical commodity trading
business at a price of $3.5 billion. The latest divestiture is
strategically in sync with its scheme of pruning non-essential
operations and emphasizing on its main businesses.
Currently, JPMorgan sports a Zacks Rank #3 (Hold).
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