J. P. Morgan's Worldwide Securities Services business has been appointed to provide private equity fund administration services to 8 Miles Fund I, a Pan-African private equity fund that plans to invest in businesses across a broad range of industries, with the aim of driving long-term growth in Africa. 8 Miles, which recently closed its first fund raising, plans to focus on growth sectors in Africa including agribusiness, consumer and retail, health, telecommunications, banking and financial services.
J.P. Morgan will provide a set of comprehensive services including fund and partnership accounting, capital call/distribution management, investor reporting, and investor tracking, investor relations support and treasury services.
The fund, which was an initiative of Bob Geldof, the musician and philanthropist, aims to become one of the largest private equity investors in Africa. Investors in the fund include the African Development Bank; CDC, which is the UK government-owned development-finance institution; and the International Finance Corporation, the World Bank's private sector arm.
The news came ten days before J.P. Morgan's investment arm blew up from a $2 billion loss, caused by "egregious" mistakes (Jamie Dimon's words).
8 Miles contracted with a division of J.P. Morgan marketed as:
A premier securities servicing provider that helps institutional investors, alternative asset managers, broker dealers and equity issuers optimize efficiency, mitigate risk and enhance revenue..Geldof's 8 Miles needs to stay away from synthetic credit instruments at a minimum.
J.P. Morgan estimates the business unit with the portfolio will post a loss of $800 million in the second quarter, excluding private equity results and litigation expenses.The above implies private equity is part of the egregiously operated business unit. Here's further confirmation:
(It's the) arm of the bank that JPMorgan has said is used to make broad bets to hedge its portfolios of individual holdings, such as loans to speculative-grade companies.Speculative grade financing equals PEU's. Bob Geldof may wish to look behind Jamie Dimon's cold eyes, given J.P. Morgan's current lack of sunshine.
Update 5-11-12: A former Wall Street reporter commented, "Glad to see that the casino mentality is alive and well in the risk management department! I mean how much more embarrassing does it get? But, I'm sure no one is humbled." Spot on! It's a matter of time before some financial titan analogizes it to sex. Are you feeling lucky today?