JPMP Asia fund ‘oversubscribed’

The JP Morgan Partners affiliate is aiming to announce a first closing of its new fund later this month, with current levels of demand indicating it will be significantly oversubscribed.

JP Morgan Partners Asia (JPMPA), an affiliate of JP Morgan Partners – the private equity arm of global financial giant JP Morgan Chase – is set to announce a first closing of its new fund within weeks. The fund is officially aiming for a final closing of $1.1 billion around two months after the first closing – which would equal the amount raised by its debut Asia Opportunity Fund in 1999. 

However, in the face of what JPMPA partner Atsushi Abe described in an interview with PEO as “strong demand from institutional investors”, the firm is currently discussing the level at which the fund should be capped. “You only have to look at the recent CVC Asia fundraising to gauge the current level of demand [for private equity funds in Asia],” said Abe. CVC Asia, which set an initial target of $1 billion for its latest fund, announced a final closing in May 2005 on $1.975 billion.

You only have to look at the recent CVC Asia fundraising to gauge the current level of demand

Atsushi Abe, partner, JP Morgan Partners Asia

Abe said JPMPA would change its name in due course to reflect the new identity of JP Morgan Partners, when the latter is spun out of JP Morgan Chase. In March this year, JP Morgan Chase reported that it would be spinning out its $13 billion private equity unit once it had finished investing its current $6.5 billion Global Fund. It is understood that the unit still has around $2 billion to invest. When JP Morgan Partners does go independent, Abe said it was likely that his firm would adopt the new name with the ‘Asia’ suffix added to the end.

JP Morgan Chase accounted for around three-quarters of commitments to JP Morgan Partners’ Global Fund, which was closed in 2002. Its commitment to that fund will continue, but it has pledged to invest no more than $1 billion in the new independent fund. Abe said JP Morgan Chase had committed around 25 percent of JPMPA’s Asia Opportunity Fund, with the rest coming from financial institutions and wealthy Asian and US families.  

In the interview, Abe said JPMPA, which opened an office in Shanghai last month, would shortly be doing the same in Melbourne, Australia. The firm, which has around 20 professionals in the Asian region, also has offices in Hong Kong and Tokyo and a small operation in Seoul. The firm has five core markets – Japan, China, South Korea, Singapore and Australia – but Abe said Japan and China appear to represent the best deal opportunities at present.

In October 2004, JPMPA acquired a 65 percent stake in the Global Thermal Systems business of Australia’s Futuris Corporation in a $275 million deal. In December, it acquired Rhythm Corporation, the Japanese automotive component manufacturer, in a $140 million secondary buyout from The Carlyle Group.