US based lender JPMorgan Chase & Company is to acquire Brazilian hedge fund and private equity firm Gavea. JPMorgan Chase is America’s second biggest US lender in terms of assets. The bank agreed to buy the Brazilian firm for an undisclosed amount. The reports were carried by a Brazilian paper, Veja magazine in its online edition on Monday. JPMorgan Chase was expected to announce the acquisition of the Brazilian firm Tuesday in New York.

The paper had reported the investment would be made formal today and under the terms of the deal, Gavea’s founder Arminio Fraga will be required to stay at the helm of the Rio de Janeiro-based investment firm for at least another five years, the column said. Gavea was set up back in 2003; a short while after Fraga left the Brazilian Central bank. Fraga is manager of some $6 billion in assets and is as well a member of JPMorgan Chase’s international board.

However, when reached for comment, the paper reported Fraga refused to disclose any information. A Reuters report indicated the investment will be made formal Tuesday, but said requests for comment over the speculation had been turned down.  JPMorgan’s office in Brazil declined to comment on Veja’s report. JPMorgan’s New York-based media office did not have an immediate comment on the Veja story, said Reuters.

The deal has been under wraps for the last eight months, when speculation first arose over a potential purchase of a minority stake in Gavea by JPMorgan Chase. Since then, there have been ongoing talks with local Brazilian media reporting from time to time an impending deal. Under terms of the original agreement, JPMorgan would carry out the acquisition of a part of Gavea through Highbridge Capital Management, a hedge fund company that manages alternative investments for the New York-based bank.

JPMorgan bought control of Highbridge, which manages about $21 billion of assets, in 2004. Highbridge also did not have an immediate comment on the Veja article, when contacted by Reuters.  JPMorgan Chase has been the subject of endless conjecture regarding its interest in the Brazilian firm, as the firms bounces back from the effects of the biting economic recession that almost saw it go bust. JPMorgan has undertaken a string of investments aimed at bolstering its position and placement amongst the major financial institutions globally.