JPMorgan's Investments Are Keeping In-House Fund Managers Busy
Squirreled away in JPMorgan Chase's earnings presentation is a number that might spell opportunity for job-seekers with experience managing in-house investments for a corporate treasury.
In its "corporate" segment, the bank recorded $1.0 billion in non-interest revenue due to "trading and securities gains." Another significant gain could show up next quarter as JPMorgan actively manages holdings at the corporate level.
"We don't usually count on gains or guide for gains, but we had gains of $1 billion related to repositioning the corporate investment portfolio," CFO Michael Cavanagh said on Wednesday's investor conference call. "That's a significant item to the positive.... We may have that again in the second quarter, maybe not to this magnitude, as we continue to focus on how we want the investment portfolio positioned."
Net interest income from the corporate portfolio also is running above normal, Cavanagh said.
A bank's corporate-level investments normally are managed within a corporate treasury, entirely separate from business units that manage client assets or trade on behalf of clients or using a bank's capital. A JPMorgan spokesman wasn't immediately available to clarify who runs the corporate portfolio or whether that team is expanding.
Investment Bank Has Been Hiring
Other takeaways from the company's first-quarter results:
- The investment banking division added staff for the first time in two years. Division headcount climbed by 323 or about 1 percent - the first net increase since the second quarter of 2008 (when more than 11,000 former Bear Stearns bankers temporarily landed there).
- Other divisions added a total of nearly 4,000 employees last quarter, a 2 percent increase. JPMorgan is adding staff "everywhere," Chief Executive Jamie Dimon said.
- Fixed-income trading results surpassed expectations, which bodes well for compensation and future job opportunities in that area. The $5.5 billion first-quarter revenue from fixed-income markets was up 100 percent over the 2009 fourth quarter and accounted for most of the investment bank division's $8.3 billion total. Most of those revenues were driven by client flow, with very little attributable to proprietary trading, Cavanagh said. But he and Dimon don't expect revenue from fixed income, commodities and currencies to maintain that high level through the rest of 2010. The expected impact of pending derivatives legislation is one reason.
- Compensation expense came in at 35 percent of revenue, near the historically low 33 percent of revenue JPMorgan allocated to compensation for all of 2008. However, bank executives indicated the ratio will be adjusted as the year plays out. "Obviously we'll be competitive and do what we need to do over the full year," Cavanagh said.