J.P. Morgan European chief: Don't be a typical investment banker
Vis Raghavan, deputy CEO for J.P. Morgan in EMEA, has a method of working out whether someone is a good hire, and it involves a hypothetical old man.
“I might say, imagine there’s an old man who is looking to invest his savings and he wants you to act for him,” he tells us. “I say, here’s $100, $1,000, $1m– what would you do?”
If this seems just like a test of investment prowess, Raghavan says there's more to it than meets the eye. It's a discussion point; a deceptively simple question that allows people to excel, compromise or lead themselves down their own dark alleys. The idea, says Raghavan, is to question how people reason and stand up under pressure.
“Some don’t ask his age,” he says. “What’s your definition of ‘old’ – is he retired, approaching retirement, older than you? Some people suggest derivative products. I say, how can you suggest complex financial products to someone, how about some form of hedge or income protection? Think of his grandchildren.”
“You get to test everything – their mental agility, quantitative skills, financial knowledge, general knowledge, empathy and humility,” he adds. “You can also tell if this person likes to have a laugh or if will they be pleasant to work with.”
Suffice to say, a lot of people want to work for J.P. Morgan and not many get in. At the graduate level, J.P. Morgan tells us that it accepts 2% of applications. The bank came top of the 2017 eFinancialCareers Ideal Employer rankings, knocking last year’s winner, Goldman Sachs, into second place.
J.P. Morgan also topped the vast majority of investment banking league tables again in 2016 and Raghavan says the bank is well-positioned for any recovery in 2017. Part of this is because J.P. Morgan has stuck to its guns and hasn’t made “myopic decisions to exit business lines” and “never made fickle large scale headcount reductions", says Raghavan.
Still, Raghavan says there’s “always room for improvement” and his attitude has a touch of Roger Federer about it.
“In town hall meetings, I keep bringing up the analogy of the Wimbledon championship,” he says. “The day after winning the tournament, what makes the champion get back on the treadmill and start the whole process again? You might have won the final in five sets, but winning it 6-0, 6-0, 6-0 makes you the champion beyond doubt.”
And if you want to impress Raghavan, don't resort to cliche. "I don’t like it when people become the stereotype of the person they think investment banks want to hire," he says. "Don’t hide behind this myth – I like people to be themselves and to be genuine. We want people who will say what needs to be said or things will never change or the norm will never be challenged. Personally, I like people to be honest and direct."
Raghavan joined J.P. Morgan 17 years ago from Lehman Brothers, initially to head up its equity-linked capital markets business for Europe and Asia. He’s held various senior jobs at the bank during his time there including head of debt and equity capital markets for Europe and Asia and global head of equity capital markets. His current role also includes head of the corporate and investment bank for J.P. Morgan in EMEA.
Here, he talks about who J.P. Morgan hires, his own career and why investment bankers need to be tech-savvy.
Can you describe the typical J.P. Morgan investment banking recruit?
I’d say that everyone who works here needs very strong intellectual skills – but to some extent that’s a given. Communication skills and the ability to work as part of a team are also obviously important, and I also like positive, glass half-full type people with a can-do attitude. We seek people who are confident, but humble. So essentially, intelligence, motivation and humility are the three important traits amongst others.
What are your plans for hiring in the investment bank this year?
We’re always looking to further build our investment bank, across asset classes, products and geographies. One big theme across our hiring plans for 2017 is in the area of technology. We see technology as central to everything we’re doing within the investment bank, whether that’s our electronic offering, compliance, front office monitoring tools, trading algorithms, artificial intelligence or basing our infrastructure in the cloud. Technology is a competitive advantage for investment banks, it is the present and the future, it will be the key differentiator – and J.P. Morgan will lead with it.
Hiring technology professionals is a priority for us, but we’re increasingly expecting a level of technology competence from all the people we take on. If I look at how my children interact with technology – it’s entirely different from a generation ago and is just embedded into their lives. We’re not saying everyone has to be a coder, but we’ll look for an element of technical savvy in all the people we hire.
How do you keep your employees motivated?
We ask our employees to be relentless in the pursuit of excellence. We are privileged to be a leader in all the businesses we do but this top position isn’t guaranteed. Even if you’ve proven yourself to be among the best and have remained at the top for a sustained period of time, there are always things you can do better.
In town hall meetings, I keep bringing up the analogy of the Wimbledon championship. The day after winning the tournament, what makes the champion get back on the treadmill and start the whole process again? You might have won the final in five sets, but winning it 6-0, 6-0, 6-0 makes you the champion beyond doubt. In short, there is always room for improvement.
What are your predictions for 2017?
Some of the big macro themes that emerged in 2016 are likely to continue to develop this year. In Europe, Brexit is the big thing that will shape the geopolitical and economic landscape with a lot of uncertainty about the outcome. I think it will be a choppy year. But do I believe that investment banking activity will grind to a halt? No, amidst all the volatility there will also be significant opportunity. There are many companies looking to grow and diversify through acquisitions and volatility in the markets will be good for the trading functions of investment banks.
We pride ourselves on the long tenure and continuity of our people, we consistently take a long-term approach to our business, we avoid taking myopic decisions to exit business lines and we have never made fickle large scale headcount reductions. Our business hasn’t changed because of short-term changes in the markets, and when the market moves in whatever direction, we have the scale to take advantage of it.
Can you tell us what motivated you to get into banking in the first place?
I grew up in India and studied physics at the University of Bombay. I came to the UK to do a post-graduate degree in electronic engineering and computer science at Aston University, and fully intended to go into a technology role. But I also qualified as an ACA from the Institute of Chartered Accountants in England and Wales and it was then that I started seriously thinking about getting into investment banking. Just last year, I received an honorary doctorate in science from Aston, something I am really pleased about.
For me, banking is the perfect marriage of quantitative skills and real life business situations. You’re at the cutting edge of strategic thinking, you are involved in projects that allow you access to the boardrooms of the largest companies in the world. There is immense satisfaction and pleasure that comes from helping clients - companies, investors, governments and supranationals - with their strategic business and funding needs.
In banking you make the news – it’s extremely gratifying to work on a deal and then see your work reported in the press. Banking has had its critics in recent years, but I believe that working in the sector means that you have a critical role to play in shaping the future of businesses. You have your finger on the pulse, there’s a lot of diversity, and you interact with all walks of life – you could be talking to a healthcare company in Germany, a government in Latin America, or an African mining company… the possibilities are limitless.
What was the biggest turning point in your career?
Honestly, I don’t think a single moment shapes careers, but a number of different factors can have an influence. I am extremely motivated, I am persistent and I genuinely care – this has helped me throughout my career. I also think that creativity is an under-appreciated trait in investment banking – you have to be creative to make an impact with clients. I have a motto to every problem – “there is always a solution, you just haven’t thought about it yet”. And the more of an impact you make, the more clients and colleagues want to work with you.
The biggest regret?
No regrets, ever.
What would you tell your 25-year-old self?
Have a bit more patience. It’s difficult, because I think the fact that I’m impatient really helps me get things done, but I’d probably tell myself to calm down a bit.
What interview questions do you always ask?
The one thing I always ask is not so much a question as a case study. For example, I might say, imagine there’s an old man who is looking to invest his savings and he wants you to act for him. I say, here’s $100, $1,000, $1m– what would you do?
The beauty is that there’s no right answer and you get to find out a lot about the interviewee by how they react. For example, some people will rush in and say they’d allocate a certain percentage to equities and a certain amount to bonds without asking any questions about his risk appetite.
Or some don’t ask his age. For example, what’s your definition of ‘old’ – is he retired, approaching retirement, older than you? Some people suggest derivative products. I say, how can you suggest complex financial products to someone, how about some form of hedge or income protection? Think of his grandchildren.
You flesh the whole thing out, question every decision. Sometimes this means that people sit there nervous at their answers. Sometimes they take my comments on board and adjust their recommendations; others stand firmly by their convictions. You get to test everything – their mental agility, quantitative skills, financial knowledge, general knowledge, empathy and humility. You can also tell if this person likes to have a laugh, will they be pleasant to work with?
What would stop you hiring me?
I don’t like it when people become the stereotype of the person they think investment banks want to hire. Don’t hide behind this myth – I like people to be themselves and to be genuine. We want people who will say what needs to be said or things will never change or the norm will never be challenged. Personally, I like people to be honest and direct.