JPMorgan in Talks to Purchase Stake in Fraga’s Fund Firm Gavea

JPMorgan Chase & Co. has spoken to Arminio Fraga about buying a minority stake in the former Brazilian central banker’s fund company Gavea Investimentos Ltda., according to a person with knowledge of the talks.

The discussions are preliminary and may not end in a transaction, said the person, who requested anonymity because the talks are private.

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JPMorgan, the second-largest U.S. bank by assets, owns the $23 billion Highbridge Capital Management LLC, which oversees hedge funds and mutual funds. The New York-based bank has been looking to extend its private banking and asset-management business in Latin America.

Fraga, 52, started Gavea in 2003 after stepping down as Brazilian central bank president, a post he held for four years. Before that he spent six years managing money for billionaire George Soros’s Soros Fund Management LLC.

Darin Oduyoy, a spokesman for JPMorgan, declined to comment. Fraga didn’t return calls seeking a comment.

Gavea, which runs private-equity and hedge funds, has offices in Rio de Janeiro and Sao Paulo and manages $5.8 billion, according to the company’s Web site.

Fraga is a member of JPMorgan’s International Council, which advises the bank on its global business.

The talks were reported earlier today by Valor Economico, which cited unidentified people close to the negotiations.

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