J.P. Morgan Partners has decided not to sell the management of Octagon Credit Investors after bids came in too low, according to a source familiar with the situation. Instead, J.P. Morgan will seek to sell its equity investments in the Octagon series of CLOs, the source added. James Ferguson, senior portfolio manager of Octagon, was traveling and did not return calls. A spokeswoman also did not return calls.
"J.P. Morgan wanted bids for Octagon as a management company and on the investments J.P. Morgan made in the Octagon deals," said a source familiar with the bid proposal. J.P. Morgan has a considerable amount of equity in the Octagon series of deals, he stated. As part of the sell-off process, "They wanted people to bid for both and consideration would be given to both." Now they are looking to sell some of the investments separately and are not selling the management company, because the bids for the management company were too low."
LMW first reported in August that Octagon, which has over $1.75 billion in assets under management, could be for sale (LMW, 8/31). J.P. Morgan had made it clear it was looking at ways to reduce its private equity commitments. A portfolio manager explained that Octagon's last CLO, Octagon VI, was being marketed by Bear Stearns with a disclosure statement that notes that the firm may or may not evaluate strategic options.