Bankers profited when the bubble was roaring. Now, JP Morgan will chew on the gristle and bones. It is going to starting dealing in distressed housing debt.
JPMorgan Asset Management (JPMAM) is taking on the challenge of selling distressed real estate by launching a small fund for institutional investors. J.P. Morgan Global Asset Management Real Estate Assets has launched Junius Real Estate Partners, which will, in part, purchase distressed debt left over from the housing bubble burst in 2008, an event that nearly caused the U.S. financial markets to collapse.
JPMorgan will launch a new distressed real estate fund, although critics say that the firm itself is, in part, the very reason why so much real estate in the U.S. is distressed.The bank is betting that the new fund will do well because it will act as a boutique, even though it is wholly owned by JPMorgan, and will only have seven or eight employees. The employees will have a direct stake in the new subsidiary.