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JPMorgan Creates $1.2 Billion Digital Growth Fund
By Doug Caverly
Staff Writer
Article Date: 2011-02-24
Although the term "bubble" is beginning to be used with increasing frequency, JPMorgan Chase appears to have every confidence that companies like Facebook and Twitter will continue to grow and become profitable. A regulatory filing indicates that the organization's created a digital growth fund worth more than $1.2 billion.
Scott Austin wrote late yesterday, "J.P. Morgan's asset management unit raised $1.22 billion for a fund called J.P. Morgan Digital Growth Fund LP. That's about double the amount reported last week by The Wall Street Journal, which, citing anonymous sources, stated the firm planned to raise between $500 million and $750 million for a digital-media fund to invest in Internet and digital-media companies."
Perhaps the initial report was off by a significant amount, then. But there's also the possibility that investors showed a lot more interest than JPMorgan initially expected.
Anyway, Austin later continued, "It's not clear whether the firm is using this fund to invest directly in companies or whether, like Goldman, it's buying and selling shares on behalf of clients in specific companies. However, the firm is being managed by legal and management services firm Walkers Global, suggesting J.P. Morgan is not investing like a venture firm would in which partners not only invest in companies but serve as active advisers to help them build their businesses."
This development could encourage many normal investors to follow suit and throw money at Facebook, LinkedIn, Twitter, and Zynga as soon as possible.
Or perhaps, already feeling left behind, some ordinary investors will now stay clear of social media, protecting themselves in the event a bubble does wind up bursting.
About the Author:
Doug is a staff writer for WebProNews. Visit WebProNews for the latest eBusiness news.
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