JP Morgan’s asset management unit is planning a major investment in privately held technology companies, according to reports in the Wall Street Journal.
The proposed fund is seeking to raise between $500 and $750 million from wealthy investors to pour into companies like Twitter and Groupon.
JP Morgan plans to buy and sell shares in these companies on behalf of clients, rather than investing the firm’s own money. The move follows Goldman Sachs step into the new media marketplace, which saw the firm provide a $1.5 billion round of financing for Facebook, valuing the social network giant at $50 billion. Two-thirds of the funding for the deal came from investors outside the US, as Goldman was concerned that the investment pool might have difficulties with American securities laws.
But Facebook is just one of the hot spots in what seems to be a rapidly expanding market. Social buying site Groupon recently raised $950 million from several major investment firms, while a possible takeover of Twitter by either Google or Facebook has valued the micro-blogging network at between $8 billion and $10 billion.
News of JP Morgan’s new fund comes ahead of the firm’s annual investor conference and is expected to form part of JP Morgan chief executive Jamie Dimon’s plans to seek new opportunities for growth.
