Morning Coffee: JPMorgan thinks bond salesmen can do banking deals. Hedge fund manager’s novel approach to harassment claims
The two great noble houses of investment banking, alike in dignity, are “Sales and Trading” and “Capital Markets and Advisory”. And relations between the two are often rather like the Montagues and Capulets; they’re two indispensable parts of the same show, but that doesn’t mean that they have much in common. Usually this is reflected in co-head structures; when you have joint leadership of a regional business unit, one co-head represents markets and one represents bankers.
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Conor Hillery and Matthieu Wiltz are this star-crossed pair at JPMorgan. The two men were appointed co-CEOs of global banking in EMEA late last year, and have since been making a point about how well they get on. Wiltz has a background in credit sales and runs JPMorgan's EMEA markets business. Hillery is a financial institutions group (FIG) banker by trade and runs JPMorgan's European investment banking business.
However, things are changing with their most recent promotion. Wiltz is being asked to cross the divide.
While Wiltz remains head of EMEA sales and global head of credit, securitised products and public finance sales, he is also going to be given “dealmaking” responsibilities. Hillery keeps his role as EMEA head of investment banking.
It’s not completely clear what deals Matthieu Wiltz is going to be doing, but we might speculate that it’s related to management’s decision to increase the pressure on JPMorgan bankers to ask for more business and win back market share. Among the core skills of any head of sales and trading is the ability to put pressure on people.
It might backfire. The culture of investment banking is different to the trading floor; M&A and capital markets deals intrinsically take longer to put together than bond trades. There is a fine line between hustle and hassle; it’s good to promote aggression and proactivity, but not if it starts to undermine long term relationships for the sake of quick transactional wins. Filippo Gori, the previous JP Morgan EMEA CEO once warned that the switch from trading to banking was “a big cultural shock”.
Elsewhere, it's not easy to be a hedge fund founder facing an investigation by the board, which appears to have unearthed dozens of misconduct allegations. What do you do?
If you’re Crispin Odey, it seems that you tolerate it once, agreeing to a final written warning from the executive committee of Odey Asset Management. But if they begin a second investigation, following further complaints, your patience wanes.
A new filing by the Financial Conduct Authority, which is in a legal battle with Odey over its decision to ban him from financial services (which he disagrees with), suggest Odey didn't take kindly to being investigated.
After berating the board as “spineless” and telling them that “HR law doesn’t apply here”, the Financial Times notes that the filing claims that Odey used his majority shareholding to dismiss the entire committee, appoint himself the only member and then vote to suspend the investigation into himself indefinitely.
Odey “strenuously denies all the allegations” (in this case, five personal injury claims brought against him by former employees and a libel claim against the FT). But it really feels like, whatever comes out in court, this is definitely an episode where a calmer temper and a bit of common sense could have saved a lot of trouble.
Meanwhile ...
Ken Griffin has admitted that CEOs find it “incredibly distasteful” to have to “suck up” to the White House in order to keep running their business. This might seem inconsistent with past statements the Citadel founder has made about President Trump, but it’s entirely in line with the pod shop model – if you lose a couple of per cent support in the opinion polls, you get your allocation cut. (WSJ)
At the age of 71, Howard Silverblatt of S&P Global has decided that “that sixty hour workweek is not as much fun as it used to be”, even if you can spend it working from home in Florida. He is retiring, and now lots of investors are panicking about how they might replace the “pope of earnings”. (WSJ)
Never previously someone who has shown a huge amount of concern for his reputation, Lars Windhorst demonstrates that even his thick skin is not impenetrable; he’s been moved to strenous denials of any involvement with Jeffrey Epstein after an email showed up which appeared to suggest he’d been asking for a meeting. (Financial News)
The strain of working in finance can often break up marriages, but something weirder might have happened here. A senior official at the FDA is being accused of having concocted a “sham divorce” so that his venture capitalist wife wouldn’t have to divest some of her investments. (Bloomberg)
The past is never dead in Swiss banking – it often isn’t even past. UBS is still dealing with further investigations into it (and Credit Suisse’s) actions with respect to the bank accounts of fugitives from the Nazis. (WSJ)
Jason Ader was once a prominent activist investor, claiming CEO scalps like that of Marisa Meyer at Yahoo. He is now in court, being sued by his own mother over a defaulted mortgage and begging the judge not to “take the shirt from his back”. The good days are over. (NY Post)
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