Conor Hillery and Mathieu Wiltz, the newly promoted co-CEOs of JPMorgan’s EMEA businesses, have been doing a round of interviews, outlining their ambitions for one of the most frustrating, but potentially remunerative global markets. They are very keen to emphasise that their co-head relationship is a true marriage of minds rather than a simmering rivalry, with Wiltz noting that “We pitched to be promoted together, so since day one, we have said that there’s no race against each other”.
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They’re also trying to get the local staff fired up to meet their target of 20% revenue growth over the next four years. This is a bit of a reduction from the 40-45% growth achieved under Filipo Gorri in the last five, but of course it comes from a higher base, and without the benefit of the post-pandemic recovery. It’s also going to have to mean higher productivity from individual employees; Wiltz says that the EMEA headcount “is likely to plateau from where we are at the moment”, despite recently having made plans for a new UK headquarters with room for 12,000 bankers.
How will they do it? Apparently, by being a bit more pushy. The new co-CEOs think that in the past, JPMorgan bankers have been “seen as the nice partner”, but consequently haven’t spoken up enough to demand more business. The message to EMEA is “don’t be afraid to ask”.
Of course, this is surprisingly difficult to do. It’s not exactly that bankers are shrinking violets, but clients do not always appreciate being given the hard sell. Top management often underestimate how tricky it is to manage a personal trusted-advisor relationship while also bringing in the vulgar element of commerce, mainly because they are so good at it themselves.
In other regions of the world, the way that this delicate interpersonal balance is achieved is through the bonus system. Bankers are encouraged to overcome their natural shyness by being paid a relatively small base salary and a much larger bonus. But of course, in Europe this is not allowed; since the financial crisis, bonuses have been capped for “material risk takers” (which includes most of the front office).
Naturally, Wiltz is opposed to this; he’s been encouraging the EU to follow the UK’s example and scrap the bonus cap. Neither he nor Hillery are exactly saying that this is one of the things stopping them from employing more people, but they’re not exactly not saying that, either. So we might expect to see JPMorgan doing more of its European business out of London, and might run into some of the same cultural problems as other banks have seen when they try to increase the incentive element.
Elsewhere, apparently the high point of McKinsey boss Bob Sternfels’ speech at their recent 100th anniversary celebrations was a rallying cry that “we will kick some ass as we start our second century”. But McKinseyites who cheered along back in October might now be worrying that he didn’t just mean “kick ass” in the sense of “do business things really well”. But that some actual (metaphorical) backsides might be kicked, in order to encourage their owners out of the building.
McKinsey doesn’t really do mass layoffs (of its own consultants, that is, they absolutely love telling client firms to make people redundant). But the firm’s leadership have been going round indicating to management, particularly in non-client facing areas, that there might need to be at least 10% fewer posteriors on seats.
Which could have interesting consequences for the banking industry. Because a lot of extremely shrewd and talented people, with a blue-chip name on their resume, excellent industry contacts and really good presentation and sales skills, are going to have a conversation in the next few months which will leave them thinking that “it’s up or out, and up ain’t happening”.
And there really aren’t many other jobs which will support a McKinsey management consultant in the manner to which they’ve become accustomed, except investment banking. So the industry talent pool might get an unexpected new injection of capacity in the New Year.
Meanwhile…
No hard feelings between BlueCrest and Panos Yiasoumi; he left earlier this year to work for Eisler Capital, but now that Eisler is shutting down, he’s boomeranged back to his former employer. (Financial News)
“They’re mostly all scams, except for my coin”, according to Iggy Azalea, whose memecoin is currently 99% down from its launch price. In general, the crypto entrepreneurs behind some of the most successful memecoin plays have been surprisingly reluctant to take the credit. Possibly they are worried about a future change in the compliance environment, possibly they’re scared that someone will beat them up to steal their crypto. (Bloomberg)
JP Morgan will lose a bit of living history with the retirement of its global chair of investment banking, Jamie Grant. He joined the firm in 1980, before it even had an investment banking business. While at JPM he saw the development of the Eurobond markets and worked on their first ever IPO. (Reuters)
Credit Suisse used to have a very strong prime brokerage business (in fact, a bit too strong – they were one of the favoured providers for Archegos). UBS now wants to build on it – having seen “record year after record year”, they are targeting a global fourth place in market share, concentrating on US firms that want to expand internationally. (Financial News)
The “bake-off” has begun for advisors to work on the IPO of SpaceX. The banks who took the pain on the Twitter acquisition will presumably be hoping for some payback, while Morgan Stanley’s tech team may see it as an opportunity to demonstrate that they were more than the personal franchise of former head Michael Grimes. (WSJ)
Worrying news for expat parents in Singapore, as one of the local franchises of some posh British public schools seems to have problems with safeguarding and leadership. (FT)
Everyone knows about traders’ love of poker (both “Liar’s Poker” and the normal kind). But there are also finance lessons to be learned in Dungeons & Dragons, crosswords and even Jeopardy. (Bloomberg)
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