J.P. Morgan Enters U.S. Secondary Market

The asset management arm of J.P. Morgan has raised a little more than $1 billion toward a fund targeting investments in the secondary market, adding to the flood of capital that has recently gushed into the sector.

The fund, called J. P. Morgan Secondary Private Equity Investors, raised $781.2 million from 324 investments, while a parallel offshore fund raised an additional $280.3 million from 198 investors, according to regulatory documents.

The filings indicate that “No further sales are expected to take place.”

A firm representative declined to comment.

J.P. Morgan has entered the secondary market in a much smaller way in the United Kingdom, raising $93.4 million to invest in secondary assets through its publicly traded $500 million fund, JP Morgan Private Equity Ltd. The fund came under the management of JP Morgan Asset Management in 2008 when Bear Stearns was acquired by J.P. Morgan.

The secondary funds follow an influx of interest in the secondary market. Just last year, Goldman Sachs raised the largest ever dedicated secondary fund at $5.5 billion.

Meanwhile, Stanford University, which manages about $12.6 billion in assets and has an estimated $5 billion in unfunded commitments in alternative assets, is considering a secondary sale of up to $1 billion of its private equity portfolio.

As previously reported, Stanford does not plan to sell majority stakes in its partnerships, but rather minority positions that would enable it to maintain relationships with its general partners. The possible sale represents less than 7% of its total investment portfolio.

“The strong rally in equity and credit markets makes now a good time to test the waters in the secondary market for some of our private equity investments, which would further enhance portfolio liquidity and flexibility,” John Powers, CEO of Stanford Management Co., said in a statement. —Erin Griffith