JPMorgan seeks up to $10B for alternative investments

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JPMorgan Chase’s alternative investments division is seeking to raise as much as $10 billion in an effort to bolster its spending power as the coronavirus pandemic roils global markets.

“The magnitude of these dislocations is so significant,” said Anton Pil, the global head of alternatives for JPMorgan’s asset management arm. “And to get some of these markets functioning, you need a lot of capital.”

JPMorgan plans to raise $5 billion to $10 billion “in the next couple of months” from clients including pension funds, sovereign-wealth funds, family offices and private banks, Pil said. The New York-based bank already has about $10 billion of client capital that it intends to deploy on opportunities created by the market dislocation, he said. That encompasses roughly $3 billion intended for credit, $3 billion for real estate and $4 billion across transportation and infrastructure.

“We have to have a roadmap for how to deploy capital in this environment,” he said.

Newly raised capital will be earmarked for strategies including credit, where the firm will focus on financing commercial real estate and leveraged loans, special situations and private equity, and so-called liquid macro strategies such as foreign exchange, commodities and thematic equities.

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“Recent further Fed action from COVID-19 seems to put another layer on a near-40-year bond bull market,” an expert says.

Amid the tumult, JPMorgan has inked leisure and transportation deals in Europe, Pil said, declining to provide details. The firm has identified potential investments associated with European office and industrial real estate, Japanese multifamily properties, and airplanes and container ships, he said.

Buoyed by opportunities amid the liquidity struggles faced by companies hurt by the coronavirus pandemic, some alternative-investment firms across Wall Street have activated previously raised contingency funds, while others are seeking new pools of capital.

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