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News
JPMorgan fights back after raft of shock departures
by Lisa Lee
The news sent shockwaves through the CLO world. The US market’s biggest arranger, JPMorgan, had lost three of its most senior bankers to Japanese upstart SMBC Nikko, a small player better known for its private credit deals. But in the weeks since, JPMorgan has been fighting to hold the fort with some success, according to market participants.
The dramatic departure of Christine Ferris, global head of CLO primary, Anusha Joly, global head of CLO Syndicate, and Mussie Tizazu, head of US CLO structuring, occurred days before a major industry conference in Miami. Other firms may have kept a low profile, but JPMorgan used ABS East to display a show of force, according to sources.
Led by Ferris’s boss Jake Pollack, the firm’s global head of credit financing, CLO primary and direct lending, JPMorgan bankers fanned out to reassure managers and investors.
Pollack: led efforts to reassure managers
“I have confidence in JPMorgan,” said a CLO manager. “I’m not sure whether I would if it hadn’t made such an effort in Miami.”
The bank opted to employ the power of its balance sheet to buttress its case. JPMorgan’s CLO team has offered to backstop liability tranches to assuage concerns about its syndicating abilities, which is especially important to those managers that have warehouses open with the bank, said sources. It is also relying on its prowess in allocating leveraged loans, as the biggest arranger in leveraged finance.
Since the trio’s departure, JPMorgan has arranged seven US CLOs, as Creditflux went to press, similar to the five in the equivalent time before. Of course, CLO issuance has been booming this year and, as the market leader, JPMorgan had booked these deals long before the leadership turmoil. But more deals are anticipated, said sources, suggesting there has been no immediate impact.
“There is some churn. But the bank is doing everything it needs to and more,” said another CLO manager.
Despite JPMorgan’s show of force, Wall Street rivals sniffing a possible opening have been on the prowl attempting to pick up business. Some point to the experience of Citigroup in Europe. The bank lost its top CLO banker to Jefferies and fell from the top of the rankings.
One immediate problem is that there is no heir apparent to fill the void left by Ferris, said sources. Her deputy head Sean Griffin had recently left to lead the industry association LSTA.
For the time being, Jane Park, executive director of CLO syndicate, and George Blair, executive director of CLO structuring, have stepped up to spearhead the business. The bank is looking to make more CLO hires, according to sources.
JPMorgan declined to comment.
