When it comes to credit sales and trading there are few banks with a bigger presence than JPMorgan, particularly in the US market. But as the credit market transitions to a world beyond quantitative easing, there are suggestions that JPMorgan's credit business is undergoing a generational change.
At the senior end, JPMorgan's credit sales and trading business has long featured a collection of "lifers" who joined JPM soon after leaving university and who built long and lucrative careers there. In recent years, and recent months, many have left of their own accords.
The latest to leave was Guy America, JPMorgan's global head of credit trading and the architect of its global credit business. America joined JPMorgan's London graduate program in 1994 and his exit was announced in mid-August. In the memo heralding his departure, JPMorgan credited him with growing the business to its "market-leading position" and helping to, "navigate the firm and our clients through many difficult markets such as the financial crisis and the pandemic." Insiders put it more bluntly. "The chief pied piper was Guy America," says one, "He built a mammoth business at JPMorgan and was the cornerstone to its multibillion dollar success."
The catalyst for America's exit was unclear. In the same memo, JPMorgan said simply that he was planning, "to take some time out before pursuing external opportunities." The bank declined to comment further. However, insiders point out that many of the senior people in America's team have also moved on.
They include Sanj Sivarajah, JPMorgan's head of emerging markets special situations group, who was last seen taking a sabbatical on a motorbike. Sivarajah left JPMorgan after 16 years in August to "pursue an opportunity outside the firm," despite only being promoted to MD a few months earlier. Karine Massolo, the bank's head of EMEA high yield sales, left after nearly 25 years in June 2022 and is now at HSBC.
The exits come after JPMorgan said it encountered a "challenging spread environment," in the second quarter, and that the weakness of its revenues from credit sales and trading and securitization offset a stronger performance in currencies and emerging markets. After a decade of exceptional profitability (and bonuses), this may have been a catalyst for senior people quit. However, insiders also point to a spate of other exits in the preceding few years.
These include: Rupert Egan, co-head of credit trading for EMEA, who retired and now describes himself as an "aspiring distiller" in Dublin; Sebastian Pearce, the former head of European high yield trading, who left in July '21 and is now doing something similar at Deutsche Bank; Bhavit Sawjani, the top high yield credit trader, who left JPMorgan after 16 years in 2020 and is now at hedge fund GoldenTree Asset Management; and Eric Pitt, the top US credit trader who left after 15 years in 2019 and is now fighting climate change.
Some at JPMorgan say the exits are now big deal and are simply natural attrition from a successful business that has made some people very wealthy and given them the chance to do something different. This is likely true and indeed many others who run JPMorgan's credit sales and trading business (eg. Sanjay Jhamna, Pierre Morel and Richard Hyatt in London, and Austin Garrison in New York) are still in place and have been there for over a decade.
However, others also point out that JPMorgan's credit sales and trading business is going into the new environment without some of its old leader, and that the exits suggest opportunities to make really big money may be dwindling. "No one ever wanted to leave if they were high performers," says one. That seems to have changed.
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