JPMorgan Chase’s new fund aimed at investing in social-media companies is seeking to buy a minority stake in Twitter that could value the micro-messaging site at close to $4.5 billion, people briefed on the matter told DealBook on Sunday.
It is not clear whether the fund, known as the J.P. Morgan Digital Growth Fund, will invest directly in Twitter or directly buy up current investors’ stakes with the company’s consent, these people said. They cautioned that talks were ongoing and may not lead to a deal.
Investments by the fund are expected to extend to other parts of the social-media universe, a broad and rapidly expanding group of companies ranging from the gaming giant Zynga to group-coupon providers like LivingSocial.
Spokesmen for Twitter and JPMorgan declined to comment.
The potential investment by the JPMorgan fund, which is being run out of the firm’s asset management unit, marks a rapid rise in Twitter’s valuation. Two months ago, the Internet company raised $200 million from a group of investors led by Kleiner Perkins Caufield & Byers at a $3.7 billion valuation.
Trading of Twitter shares on SharesPost, a secondary market, currently value the company at about $4.3 billion.
The Digital Growth Fund follows in the footsteps of a Goldman Sachs fund that raised about $1 billion from investors outside the United States to buy up a stake in Facebook, giving the social-networking giant a valuation of about $50 billion.
So far, the JPMorgan fund has raised about $1.22 billion from wealthy outside investors, and the firm expects to collect about $13 million in commissions, according to a regulatory filing made on Friday. The minimum investment is set at about $250,000, according to the filing.
The fund is comprised only of money from outside investors, and will not use any of JPMorgan’s own capital.
News of the JPMorgan fund’s plans was first reported on Sunday by The Financial Times.
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