Morning Coffee: The love-in continues at the top of JP Morgan. A $300m banking client that turned into a nightmare

As the publicity tour for the new JP Morgan investment and commercial banking co-CEOs continues, two things are becoming clear. Everyone (including, it has to be admitted, us) wants to talk about how Troy Rohrbaugh and Jennifer Piepszak are potential rivals to succeed Jamie Dimon. And the two bankers are determined not to play along.

Click here to follow our new WhatsApp channel, and get instant news updates straight to your phone 📱

In their latest interview with Reuters, the pair are continuing to finish each other’s sentences and are sticking with iron discipline to their lines – that it’s nice to be at the top of the number one investment banking franchise on the Street, but that they’re taking nothing for granted and, in fact, are the opposite of complacent. According to Piepszak, “If you dropped in on a business review at this company, you would never guess that you were inside JPMorgan”.

This might sound like a little bit of a reversal from how things stood at the start of the year, when JP Morgan seemed unstoppable – and indeed, when some commentators argued that a virtuous circle of confidence bringing success was at the heart of its model. But the investment banking industry has always been one where only the paranoid survive. When you’re at the top, there’s only one direction left to go.

And in fact, Rohrbaugh and Piepszak may feel like they’re not short of things to worry about. JP Morgan reached the top of some key league tables last year, on the back of overall lower deal volumes. But it’s not easy to keep on top of a competitor like Goldman Sachs, who have come back strongly in 2024. JPM has also lost a few points of market share in fixed income trading and in equity capital markets.

Furthermore, Rohrbaugh and Piepszak will soon find themselves competing against some of their best former colleagues. Citi (Vis Raghavan) and Wells Fargo (Fernando Rivas) have appointed JP Morgan alumni to lead their investment banks. One of the consequences of success is that everyone starts trying to hire your people – even Goldman Sachs has taken Carsten Woehrn to co-head its M&A franchise in EMEA.

In other words, there’s not really much spare time to be dedicating to internal politics. Although both Piepszak and Rohrbaugh are certainly credible candidates for the Dimon succession, they are by no means the only possibilities. And neither of them will be able to make a strong case in the future unless the investment bank continues to deliver – something which is looking perhaps a little bit more difficult to achieve than it did a week ago, when the IPO window was being declared definitively open. So like a pair of reality show contestants, the co-CEOs at JP Morgan may be doomed to have to fight against each other one day, but for the time being there are good reasons for their alliance to remain strong.

Elsewhere, a rather disturbing lawsuit in New York has shed light on a really difficult and problematic set of relationships in the industry; the completely unequal power balance between trading desks and their big clients.

The case has been brought by a former ICAP trader, who claims to have been harassed by a member of Citi’s powerhouse Delta One desk, an operation that made $309m of revenue in 2021 and which was capable of sending very large volumes of business to interdealer brokers like ICAP. The trader claims that she was forced by her bosses to unblock her counterparty on Instagram and even to apologise for rejecting his advances, after he threatened to “reduce the flow in light of that”.

It should be emphasised that ICAP are defending the suit and have declined to comment, while Citigroup is in the slightly invidious position of not getting an opportunity to put its side in court at all – it’s put the employee involved on a leave of absence since receiving the complaint, but it isn’t directly a party to the lawsuit. 

But it would be naïve to think that there’s anything uncommon about this kind of event. Trading is a people business, in which there is a great deal of asymmetry and in which some parties are very dependent on the goodwill of others. It’s not surprising (if somewhat depressing) when some people allow their privileged positions to go to their head.

Meanwhile…

A hiring development which illustrates three trends at once – growth in mid-market advisory, expansion of second-tier overseas players and departures at Rothschild New York.  Alantra has hired consumer goods coverage banker Michael Poerschke. (Financial News)

And another trend continues – Wells Fargo continues to demonstrate it’s serious about filling the investment bank-shaped hole in its business, by hiring Kevin Healey for its global healthcare M&A team. Healey comes in from PJT Partners, a famously high-paying boutique, so it looks as if WFC aren’t scared of paying up for the right people. (Bloomberg)

Justin Best, the investment banker who won an Olympic gold medal for rowing, has now proposed to his girlfriend in Paris. It wasn’t quite the first thing he did after the ceremony – like a good banker, he remembered to update his LinkedIn profile first. (Economic Times)

It might not come as a huge surprise to find out that George Soros is a Democrat while Ken Griffin is a Republican, but here’s a useful guide to the particular policy interests and donation strategies of some of the world’s biggest hedge fund managers. (The Street)

Perhaps this sort of thing shouldn’t matter much, but it often does; Jain Global’s first monthly disclosures show that it lost 0.65% in the last month, while the other big pod shops made small gains. (Business Insider)

Retired teachers are famously some of the biggest but most demanding clients on the Street. Now the Teachers’ Retirement System of Texas is taking on the global hedge fund industry, leading an initiative to demand that performance fees are subject to a hurdle rate equal to the return on cash, and to move to “an or, rather than an and” when it comes to performance fees. (Top1000Funds)

Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, WhatsApp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.

Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)