Doug Braunstein, head of Americas Investment Banking at JPMorgan, believes the bank is reaping the benefit of the investment made in the past couple of years. The bank hired almost 20 managing directors in the coverage business last year, and hired a number of incremental managing directors into the client solutions and M&A business, so Mr Braunstein says he feels good about the size of the bank’s footprint and the reach of its businesses.
“In 2005 and 2006, we made a lot of investments to fill out our platform and I feel that our success is a reflection of that. For example, we built out our entire power team in 2005-06 and as a result have been able to win 100% of all the hybrid power financings for the institutional market. We have also been involved in about 75% of all asset sales in power. When you put all the right pieces together, it can be very powerful from a market share perspective,” says Mr Braunstein.
There have been many landmark transactions in the past 12 months. Mr Braunstein says that Freeport McMoRan’s acquisition of Phelps Dodge was a world-class transaction. “It was an important strategic adviser assignment for us, and the deal had impressive debt and equity financing elements.”
Another important deal is JPMorgan’s role in the pending merger between two iconic institutions: the Chicago Board of Trade and the Chicago Mercantile Exchange. “It has been a very complex transaction in terms of managing multiple constituencies and the process has been highly competitive,” says Mr Braunstein.
There are plenty of opportunities to grow the business and take it in new directions, he says. Aside from tapping into new markets, such as alternative energy – two new bankers have been hired to focus specifically on that area – the bank sees much fertile ground in the mid-market corporate sector; and here, Mr Braunstein says it will leverage its long term relationships with JPMorgan’s Commercial Bank.
In the next 12 months, there will be a shift in financial markets activity; but where one door closes, another opens. Mr Braunstein believes that M&A and equity capital markets (ECM) activity will continue to be strong, and that liability management will be much more important as a revenue generator. “Shifts in the leveraged finance business will open up a lot of opportunities,” he says.
“I believe there will be more corporate activity and more cross-border activity, particularly from Latin American, European and Asian corporates into the US. Equally, I think there will be a much greater focus on monetisation of some very large sponsor portfolios. Given the current situation, I expect to see more activity in financial services. I think there will be a validation of those platforms that are diverse and that have strong balance sheets. We could see some real consolidation here.”
