J.P. Morgan Chase & Co. reported another quarter of poor earnings marked by major losses in its JPMorgan Partners (JPMP) private equity portfolio. This marks the ninth straight quarter that JPMP has lost money for its parent bank, and its most recent results are by far its worst.
Total net losses for JPMP in Q3 2002 were $299 million, as compared to losses of $125 million in Q2 2002 and $105 million during Q3 2001. The New York-based private equity group first reported negative earnings in Q3 2000, but those amounted to only $25 million following $298 million of gains the previous quarter.
Bank executives said during an earnings call that JPMP invested approximately $300 million in the third quarter, and that the group was targeting $1 billion of investments per year. If this happens, the bank estimates that private equity would account for 15% of the bank’s total equity holdings, down from the current mark of 20% and its peak rate of 37%. In addition, the bank is planning layoffs of approximately 2,200 employees, but a JPMP spokeswoman said that no headcount reductions are anticipated in the private equity group.
Thompson Street Capital Partners held a $145 million final close on its inaugural PE fund. The St. Louis-based middle-market shop netted Capital Z Partners as lead investor, and will seek to take control positions in manufacturing, distribution and services-focused companies. It has already made investments in such companies as Avon Plastics and furniture maker Alan White Co.