NEW YORK Chase Manhattan Corp.s private equity unit has sold more than $1 billion of private-equity holdings to Lexington Partners of New York.
For Chase, the sale will generate a one-time gain and finance an effort to reorganize its own investing strategy.
The sale of outside partnerships comes as Chase Manhattan is taking new steps to boost investments in companies through its Chase Capital Partners arm.
Chase Capital is raising $5 billion from outside investors the first time it has sought money from outside the bank and Chase Manhattan is investing $8 billion of its own reserves in the Chase Capital fund. The banking company unveiled the investment proposal last week, the day after Wall Street analysts said the units poor performance might hurt its fourth-quarter earnings.
Given the tremendous growth in private equity, we think Chase and other bank holding companies will become regular sellers in the secondary market, said Brent Nicklas, managing general partner of Lexington Partners.
Lexington, which specializes in purchasing others private equity investments, won an auction to buy the holdings.