The fund hopes to acquire 10 per cent of the online messaging service for $450m, valuing Twitter at $4.5bn, according to people familiar with the plans.
It is not clear if the JPMorgan fund will make a direct investment or buy out existing investors and shareholders with Twitter’s approval. But the fund does not intend to buy shares on the secondary market, the people said. The deal has not closed.
The fund has raised $1.22bn to date, according to a filing with the Securities and Exchange Commission. But it plans to raise $1.3bn in total, and will have a maximum of 480 investors, say the people. JPMorgan expects to earn commission of at least $13m from the fund.
Besides the Twitter stake, JPMorgan hopes to invest another third of the fund in one other private web company – possibly games maker Zynga or telephony provider Skype.
The final third of the fund will be allocated among six other companies, they said – possibly to include coupons site LivingSocial, or Gilt, the flash-sales site. Twitter will be the fund’s focus. The company has 253m unique users per month, up 85 per cent from a year ago, according to venture capital firm Kleiner Perkins Caufield & Byers.
Internet market research firm eMarketer expects revenues to reach $150m this year.
Facebook is now worth up to $70bn on the secondary market, a price considered too rich for the JPMorgan fund, said people familiar with the plans. JPMorgan, Twitter, Skype, Gilt and LivingSocial all declined to comment.
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