How does JP Morgan Partners raise their investment capital? How does one invest in JP Morgan Partners?

JP Morgan Partners is the private equity division of JP Morgan. They get their money from institutional investors (mutual funds, pension funds etc.) and from high net worth individuals (USD$10MM or up). Private Equity firms take investors' money and invest in a number of small emerging companies, mostly private companies. The idea is that when these companies grow and go IPO, that's when they cash out. It's a high risk game. Most of these small companies never get off the ground. But when they do, the potential return could be over 500%.

Your second question was how to invest in JP Morgan Partners. Yes, you can buy shares of JPM and you will participate in the fees generated from the private equity firm. Becareful however, you are NOT really investing in the portfolio of the partnership itself. The institutional and high net worth investors who put money in are the real owners of the portfolio. JPM simply makes a fee from operating the private equity firm.

Since their merger with Chase Manhattan Bank, one can invest in JP Morgan in one of two ways:

First, by purchasing stock in the company under the symbol JPM.
(See quote here: http://finance.yahoo.com/q?s=jpm)

Second, and the more direct way to inject funds into the company, is by purchasing debt of the company ,in the form of corporate bonds. When purchasing debt of a company you are essentially making them a loan. In exchange for your $10,000, they agree to pay you 6.25% interest annually until some future date at which point they will give you your $10,000 back.

When investing in a company this way, you might want to consider their credit rating. Currently, JP Morgan Chase enjoys a rating of A+ from S&P, where the highest possible rating is AAA. (Only 9 companies in the entire world have a AAA rating). The rest of JP Morgan Chase & Co's ratings can be found here: http://investor.shareholder.com/jpmorgan...

Thus, JP Morgan Chase is what we call "Investment Grade" debt, that is, a rating of AAA, AA,A,or BBB. If they were BB or lower, like B,CCC,CC,C,etc. they would be called "Non-Investment Grade", "Hi-Yield", or simply "junk" bonds. Thankfully they ar not in this category, for though bonds in those categories will typically offer much higher interest rates (rates in excess of 10% are not uncommon), the chances of you actually getting your money get a lot dicier.

Hope this helps!
--J.