Report: JP Morgan may spin out One Equity

JP Morgan, which currently houses two private equity divisions, may eventually spin out the buyout unit run by Richard Cashin, according to a Wall Street Journal report.

One Equity Partners, a private equity division of JP Morgan Chase, may eventually go independent, according to a report in the Wall Street Journal.

The report cited a JP Morgan statement which read: “One Equity Partners may elect to raise a new independent investment vehicle and JP Morgan would invest in that fund.”

The statement noted that such a spin-out would take place after One Equity invests some $700 million it currently manages for its parent entity.

The spin-out would end a period of during which the financial services giant owned two in-house private equity teams: One Equity Partners and JP Morgan Partners. One Equity, led by Richard Cashin, was acquired when JP Morgan merged with Bank One earlier this year.

JP Morgan Partners is led by Jeff Walker. Both Walker and Cashin report to David Coulter, the new chairman of investment banking at JP Morgan.
JP Morgan Partners has roughly $6.5 billion at its disposal for investments and 133 professionals around the world. One Equity has 27 investment professionals and a commitment from its parent company of roughly $500 million per year.

When the two banks merged, industry observers questioned whether the two private equity divisions would be merged. A source quoted in the article said: “No decisions have been made, but it is reasonably clear that there won’t be two funds for a long time” under one corporate roof.

In a February interview with Private Equity International, Walker expressed no interest in pursuing a spinout of his group. 'We're part of the institution and today that's a huge advantage,' he said. 'We'd be crazy to leave the institution.'