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Private equity venture with ATTIMCO has raised $2.8 billion
NEW YORK - Two years after AT&T Investment Management Corp. outsourced its private equity investment program to J.P. Morgan Investment Management Inc., Morgan has closed its first two private equity funds of funds, raising a whopping $2.8 billion.
More than 20 institutions -- mainly pension and endowment funds, including the $120 billion New York State Common Retirement Fund, Albany; $28 billion Pennsylvania State Employees Retirement System, Harrisburg; and the $35 billion Lockheed Martin Corp., Bethesda - signed on, but ATTIMCO, Basking Ridge, NJ., was the biggest single investor, committing $900 million to the funds. The buyout fund raised $1.8 billion, while the venture cap fund was capped at $1.1 billion.
The AT&T-Morgan outsourcing deal, which had been structured so that AT&T's entire private equity investment team would move across the river to Manhattan-based Morgan, has benefited both parties. The team, led by J.P. Morgan managing director Larry Unrein, who was a vice president at ATTIMCO, has risen in the past two years from nine to 17 investment professionals. It also has developed a reputation for quality and expertise, which helped it raise two of the largest private equity funds of funds ever, according to industry sources.
Arrangement helps
Robert Angelica, chairman and chief executive officer at ATTIMCO, which manages $19 billion in defined benefit assets, said in an interview that AT&T has benefited from the arrangement, even though it is more expensive to use outside managers than...