) --

JPMorgan Chase


(JPM) - Get Report

hedge fund unit -- Highbridge Capital Management -- agreed to purchase a majority stake in Brazilian fund management company Gávea Investimentos, the two firms said in a joint statement Wednesday.

Gávea was co-founded in 2003 by Arminio Fraga, the former president of the

Central Bank of Brazil

and current chairman of

BM&F Bovespa

, Brazil's securities, commodities and derivatives exchange. Gávea, which has approximately $6 billion in assets, will expand Highbridge and JPMorgan's asset management business in the emerging markets, the release says.

"This is an important transaction for the future of Gávea and Highbridge. Gávea is a fantastic organization that reflects not only Arminio Fraga's well-deserved reputation as an exceptional economist and investor, but also his belief in the importance of creating a long-term business franchise," Glenn Dubin, CEO of Highbridge, said in the statement.

"Gávea will provide Highbridge with greater macroeconomic insight and direct exposure to investing in Brazil, which will be a powerful addition to our investment capabilities," Dubin said.

The alliance with Gávea will help JPMorgan "accelerate" its expansion plans in Brazil and the region, particularly as the multi-national bank makes pointed effort to expand its

capital markets and asset management businesses further outside the U.S.


The deal is expected to be completed shortly, the firms said.

Highbridge and Gávea will have a relationship similar to that created by JPMorgan's original purchase of Highbridge in 2004. JPMorgan has been gradually adding to its position of Highbridge, which has about $21 billion in assets under management. In 2008 JPMorgan owned roughly 78% of the firm.

JPMorgan acquired the rest of the hedge fund manager in 2009.


Gávea's investment process will remain unchanged, and its day-to-day activities will continue to be managed by its executive team, the firms said.

JPMorgan shares were rising 0.35% to $37.33 in midday trading.

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Laurie Kulikowski


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