The parent of JPMorgan Partners’ (JPMP), New York-based investment bank JP Morgan Chase & Co., has signaled that its is abandoning the private equity business, punishing the aberrant stepchild for the $789 million loss it booked in 2002.
Bleeding cash for the tenth consecutive quarter, JPMorgan Partners wrote down $91 million from the value of its $24 billion private equity portfolio during the fourth quarter of 2002. The value of JPMP’s direct holdings for the quarter dropped $225 million while the value of the private equity funds in its portfolio fell $105 million.
Although 2002’s $789 million loss is not as bad as 2001’s $1.18 billion loss, the bank appears to be losing patience. It expects JPMP’s write downs to continue, albeit at a slower pace, says Dina Dublon, the bank’s chief financial officer.
“We will continue to reduce our exposure to the asset class. We believe direct private equity investments to be a core strategic business,” she says.
JP Morgan will continue to divest its portfolio of private equity funds.
Contact Carolina Braunschweig
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