If you're looking for tips on how to transform from a banker to a technology professional, you could try Jamie Dimon, CEO of J.P. Morgan, for sartorial advice.
The Financial Times reports that Dimon has been spending much time hanging out in Silicon Valley and has been wearing the local attire as part of the immersive experience. Dimon has been seen wearing “polo shirts and Allbirds trainers” in an effort to seem one of the guys on the tech startup scene, says the FT.
It’s more then just method acting. Dimon's new get-up is part of a major push on the part of JPM to try and increase its investment banking market share within the technology sector. The bank has needed to make use of the CEO’s star power because two of its top dealmakers – Kurt Simon and Ethan Zweig – left over the summer to go to other banks. Now Dimon, and his special outfits, are filling the gap. The question is, for how long?
If you really want to get the bragging rights in capital markets and (particularly) M&A advisory, bringing in the CEO to do your pitches certainly helps to show your commitment to the client. However, it’s hard to build a sustainable franchise on the back of a guy who, by definition, has more important things he needs to be doing most of the time. The remaining M&A bankers at JPM West Coast – like Drago Rajkovic and Noah WIntroub in San Francisco – are likely to want to emphasise that Jamie is just there to fly the corporate flag, giving a few firm handshakes and swapping golf anecdotes, and that they are the ones actually doing the deals. But, of course, the reason that bankers regard it as an unfair advantage is that it works. JPM is in second place for US tech M&A for the year to date, and the new Palo Alto office it’s opening is evidence that its ambitions are for the top.
Of course, Jamie Dimon's lead might not just be the 'Jamie-bro' effect. It's always helpful to put a bank’s own balance sheet into deals. And Jamie has been doing that too; a commitment to provide financing was key to winning the mandate for Dell’s acquisition of EMC, for example. That’s an offering that a boutique can’t compete with, and it potentially sets up the possibility of winning all kinds of other business – fx, cash management, treasury services – which allow the bulge bracket to make more money out of an overall corporate relationship. The only problem is that while the balance sheet is a very effective tool to win business, it’s by no means risk free. Particularly in an environment where leverage is rising and the cycle close to its peak, balance sheet commitment is often how a low-risk, capital-light advisory franchise can suddenly turn into a big headache of hung-up underwriting commitments.
The real risk, though, is that taking up CEO time and attention like this has an opportunity cost which can be difficult to measure. Even the very best executives in the industry can often have their head turned by the atmosphere in Silicon Valley. And getting involved in pitching deals while wearing woollen running shoes is more fun than many other dull but necessary management tasks. A certain amount of steadying the ship is probably necessary given the departures, but it could be a bad state of affairs for JP Morgan if other franchises – or worse, risk management controls – are being starved of attention as the chief executive is chasing deals in California.
Elsewhere, Goldman Sachs have updated the benefits package in their UK office, adding fertility treatment and gender-reassignment surgery to their employees’ private medical insurance. This brings them into line with the US offices (where these treatments were added a few years ago), but what’s interesting is that it seems to be sold as a potential employee retention tool.
An age-old problem which nobody in the industry appears to have ever solved is the fundamental contradiction between “what’s required in order to succeed in investment banking”, versus “what it’s reasonable to ask from a normal human being”. Historically, the way finance has dealt with this is to accept that its top ranks are always going to be populated with driven, almost always male workaholics who have made huge sacrifices to get there and whose entire concept of personal fulfillment is built around their work. While there’s no real sign that anyone – perhaps least of all Goldman – has got any very good ideas about how to bring some concept of work-life balance into the industry, it’s a good sign that, by signalling that it recognises that there are some things which employees might regard as even more important to their life goals than promotion to managing director, GS is at least recognising there’s an issue here.
Deutsche Bank is still hiring when it has to. Navtej Bullar has joined from Lazard, after previously spending 11 years at Goldman Sachs. There have also been two internal moves onto the healthcare team as Deutsche attempts to rebuild its sector coverage after Darren Campili left in June. This is unlikely to signify any change to the overall story of cost cutting – it’s just that when a franchise absolutely has to be rebuilt or abandoned, expensive hires end up being made (Financial News)
As well as a strongly-worded editorial on Facebook, the Times has an account of the meeting between Jes Staley and activist investor Edward Bramson. It looks like they had to agree to disagree on the subject of whether the investment banking strategy is viable (Times)
The “inconvenient truth” for Deutsche Bank is that it is no longer as important for Germany’s industrial future as it used to be (Bloomberg)
A wide ranging interview with Abigail Johnson of Fidelity covers cryptocurrency, the move to cut index fund fees to zero and the overall future of the asset management industry (Bloomberg)
Not clear how you’d define an “excessive” party, but apparently Wall Street firms are being accused of overspending on Christmas celebrations and reducing their tax bills by doing so. (New York Post)
Bank of America has updated its logo for the first time in two decades. The new logo is described by the bank as “reflecting cutting-edge technology and high-touch solutions for clients” and by this non-expert commentator as “slightly narrower stripes”. (Charlotte Observer)
Stephanie Gibaud, the whistleblower in the UBS French tax case, has been awarded token damages only (€3,400). She had been suing the French government for compensation for emotional stress caused by the case, but the court disagreed that it was particularly stressful. (Swissinfo)
And Citigroup is running into planning trouble in getting permission to build a new dock in Manhattan for an employee-only water taxi service between its two Manhattan offices and Jersey City. (The Villager)
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