- Highbridge's management has been mulling an exit for some time, reports Institutional Investor, and has been in discussions with JPMorgan (NYSE:JPM) for at least six months.
- The management team - led by CEO Scott Kapnick - would need financing for the deal (Highbridge manages $26B in assets),or an investment from a third party. Alternative investment firms typically sell for about 5x revenue, according to one banker.
- As of the end of 2007, JPMorgan was the world's biggest hedge fund manager with $44.7B in AUM. It ranks #2 this year, behind Bridgewater Associates.
- For Highbridge, a split allows it to break free of Dodd-Frank restrictions and from having to compensate employees with JPMorgan stock - both competitive disadvantages compared to other hedge funds.