JP Morgan seeks up to £8 billion for Alternative Investments
- JP. Morgan plans to acquire £8 billion additional funding for alternative investments.
- The banker is eyeing strategic stakes in Europe and Japan.
- The new round of funding will go towards credit, real estate activities, and transport and infrastructure.
JP. Morgan (NYSE: JPM) plans to raise about £8 billion to boost its spend during this Covid-19 pandemic period. The firm’s alternative-investment division said the amount would enable them to sail through the current crashed economy.
“The magnitude of these dislocations is so significant. To get some of these markets functioning, you need a lot of capital,” JPMorgan’s global head of alternatives Anton Pil said during a Monday interview.
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According to the executive, the firm is set to raise between £4 to £8 billion from its sponsors including sovereign-wealth funds, pension schemes, private banks, to name a few.
The sum will be allocated as follows: £2.4 billion for real estate activities, £2.4 billion to go towards credit and £3.2 billion for transport and infrastructure. Once the additional capital is raised, the firm will focus on financing leveraged loans and commercial real estate, liquid macro-strategies including thematic equities, commodities, foreign exchange, as well as private equity and special situations.
But even amid the disarray, the investment bank has managed to close some European deals, Pil mentioned but refused to give any further details pending an official announcement. Sources indicate that the banker has identified potential investments associated with its Europe branch and industrial real estate, airplanes and container ships, and Japanese multifamily properties.
Opportunities amid a crisis
Faced with multiple opportunities amid liquidity issues resulting from the Coronavirus pandemic, some Wall Street investment firms have resolved to activate emergency funds, with several others going for new capital.
The move by JP. Morgan (NYSE: JPM) comes at a time when The Chartered Alternative Investment Analyst (CAIA) Association has issued a four-point action plan to enlighten industry practitioners on the future of alternative investments. The organisation started developing the report earlier in the year and will particularly be useful during this period of global economic crisis to help investment firms find stability. The plan by the CAIA requires firms to embrace transparency, commit to education, advocate for diversification, and democratise but protect alternative investments.