London-listed fund of funds JPMorgan Private Equity (JPEL) wants to amass up to $100 million in dry powder via the issuance of new shares.
Subject to shareholder approval, the firm will issue between 50 million and 100 million new equity shares priced at $1 each, which the firm said represents the stock’s average trading pricein the past 15 days. Existing investors would be given the first opportunity to purchase the shares on a pro-rata basis.
The shares would be issued mid-July and give the fund cash to “take advantage of the increased flow of secondary market investment opportunities”, it said in a regulatory filing. The capital raised could also be used to strengthen its balance sheet, reduce debt and fund existing investments.
JPEL director Greg Getschow told the Financial Times that the fund has “close to zero dry powder left to do new deals, maybe just enough for a couple deals below $5 million”.
He added that investors were happy with the fund’s performance – which, in contrast to the LPX and S&P500, has seen its net asset value rise 41 percent since listing in June 2005 – but investors are disappointed the fund has no cash to do new deals.
That sentiment was recently echoed in a research note issued last month by JPMorgan Cazenove analyst Christopher Brown, who also said the firm’s strong focus on secondaries and modest level of unfunded commitments sets it apart from other listed fund of funds.
Led by Getschow and Troy Duncan, JPEL changed its name from Bear Stearns Private Equity in September 2008, to reflect it becoming a part of the JPMorgan Asset Management division following the sale of Bear Stearns to JPMorgan in March 2008.
JPEL makes direct and secondary private equity investments in Europe, North America and Asia and holds investments holds investments with fund managers including Oaktree Capital Management, Avista Capital Partners, 3i and Greenhill & Co.