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Bear Stearns Merchant Banking, the private equity arm of fallen investment bank Bear Stearns Cos., said Thursday it will soon spin off as a wholly independent entity.
In connection with the plan, Bear Stearns, now a J.P. Morgan Chase & Co. affiliate having sold out to the bank for a song in March, will retain a "passive interest" in certain of the midmarket buyout shop's affiliates, and it will still be responsible for co-investment commitments to funds currently managed by BSMB, according to a statement from the firm. BSMB was already majority owned by its management when Bear Stearns collapsed. There had been talk that BSMB, which chief executive John Howard founded in 1997 with Bear Stearns' backing, would seek complete independence, as it already operated as a largely standalone entity before the J.P. Morgan-Bear deal. The operation was already majority owned by its management and only 20% of the firm's investment capital came from the bank. BSMB's latest, $2.7 billion buyout vehicle, came largely from outside investors. Unlike many bank's in-house PE operations, BSMB derives little dealflow from its parent. BSMB plans to change its name and move to new offices in New York City, it said Thursday. In 2005, the firm considered splitting from Bear Stearns when it went out to raise its latest vehicle, but opted not to, thinking the Bear brand could bring in more investment. Bear Stearns shareholders approved the $10 per share sale to J.P. Morgan last week. - Carolyn Murphy See full story on TheDeal.com See Dealwatch: J.P. Morgan-Bear Stearns See Dealscape: Bear Stearns Merchant Banking: Bloodied, but not destroyed CategoriesPrivate capital video
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