(Reuters) – PricingDirect and Alumni, two wholly-owned subsidiaries of the biggest U.S. bank JPMorgan & Chase, have partnered to provide independent valuations of private equity securities, as the lender expands its footprint in the sector beyond providing capital.
Private equity has grown over the past few years, with an increasing number of firms turning to private credit as the main source of financing their deals. Thus, the need for fair valuations of such transactions has grown, primarily to ensure compliance with regulatory standards.
The partnership aims to assist investors to adhere to the Financial Accounting Standards Board’s ASC 820 and meet the requirements of the U.S. Securities and Exchange Commission’s Rule 2a-5, which governs the fair valuation of fund investments, the companies said on Tuesday.
JPMorgan itself has set aside $10 billion of its own capital for private credit, but that could grow significantly depending on demand, which shows banks’ growing ambition to expand its reach in the sector.
PricingDirect traditionally focuses on providing fixed income data and analytics to investors, while Alumni, a startup acquired by the bank last year, specializes in venture capital data and portfolio solutions.
(Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Alan Barona)