Thursday, December 06, 2007

Great ‘mindshare’ between client and bank,”

“Viswas Raghavan transforms JP Morgan European division equity-linked prowess into a broader platform ...”

I stumbled across this article the other day. An interview with JPMorgan’s Viswas Raghavan Head of Equity International Capital Markets. When I knew Viswas back in the early years 1993-6 at Lehman Brothers where we both worked in Investment Banking ... a mathematical genius, a very intelligent person who continues to shape future leaders of the investment banking world.

At the end of the 1990s, the state of JPMorgan’s European equity capital markets (ECM) business looked in jeopardy. Drained by a sometimes painful merger with Chase Manhattan and the inevitable staff exits, its presence in the market was negligible.

It is a very different picture now. In 2006, JPMorgan’s share of the Europe, Middle East and Africa equity issuance market jumped by 30%, and in the league tables it rose from sixth to joint first in terms of the number of eligible deals completed, and to second by dollar volume. In the year to date, it is first for global equity and equity-linked business, and second in Europe.

The foundations of JPMorgan’s resurgence in ECM have been built on the strength of JPMorgan’s equity-linked platform. Over the past several years it has become an enviable franchise, to the point where JPMorgan’s equity profit and loss was more or less accounted for by equity-linked transactions.

Viswas Raghavan, who joined JPMorgan as head of equity-linked operations in 2000 from Lehman Brothers and who is now head of international equity capital markets, has played an instrumental role in the division’s revival and the translation of equity-linked strength into broader ECM business.

Being ‘branded’ as an equity-linked house was not a slight, Mr Raghavan says, but an ideal platform on which to build an initial public offering (IPO) business. “We did the complicated bit first and then built out the vanilla business; if you can place a convertible’s delta in the market, then you can distribute straight equity. It is not a surprise for us to be where we are.”

Standing out from the crowd

Building the business in that way enabled JPMorgan to differentiate itself from competitors and prove its creative credentials, says Mr Raghavan. “Because we placed the delta we knew the investors and could deliver them to the client. Doing equity-linked deals gives you the opportunity to be smarter and more innovative. That’s a great way to build your footprint.”

The translation of equity-linked expertise into conventional equity business has slowly gathered pace over the past five years or so, spanning deals such as that for Fortis in 2002 when JPMorgan invented the floating rate equity-linked subordinated hybrid (Fresh) product – the first convertible bond to qualify as bank capital – and the extraordinary deal for Allianz in January 2005, which combined an equity-linked exchangeable bond, a straight equity placement and a hybrid capital issue.

It was not rocket science, yet this deal managed to satisfy an entire year’s funding needs in a single €4bn swoop without damaging the insurer’s share price, and at the same time strengthened earlier structures.

“There was a great ‘mindshare’ between client and bank,” says Mr Raghavan. “Intellectually, we had fun, while making sure we achieved all the client’s objectives.”

Mr Raghavan believes that this kind of mindshare is a quality that defines JPMorgan’s ECM business, and is partly determined by the longevity of the bank’s ECM team. This includes key members such as Klaus Hessberger and Ina De, co-heads of EMEA ECM origination; Monika Weiler, responsible for the equity-linked business; Sylvie Sauton*, head of ECM for France/Belgium; and Donal Quigley, head of ECM execution.

“It is the same team that has taken the bank from 18th in the league tables to the top tier, and we have worked zealously to get here. That level of achievement over so many years creates continuity and a close relationship with clients,” he says.

In 2006 – the first year that Mr Raghavan believes showed all the fruits of the team’s hard work – the firm demonstrated an impressively (and in the current climate, reassuringly) diverse business in terms of product, industry and geography. The bank’s equity-linked business continues to impress – with transactions such as the $5.8bn mandatory convertible for US-based mining firm Freeport-McMoRan – but it is participation in a growing list of trophy IPO deals that shows how JPMorgan’s ECM business has matured.

2007 Head of international equity capital markets.

2006 Head of EMEA and Asia-Pacific equity and debt capital markets.

2003 Sole head of EMEA equity capital markets.

2002 Promoted to joint head of EMEA capital markets.

2000 Joined JPMorgan as head of equity-linked capital markets for Europe & Asia-Pacific.

1998 Promoted to head of equity-linked capital markets for EMEA and Asia-Pacific at Lehman Brothers.

*Sylvie Sauton (Lehman Brothers) ... I remember you as well.

Full Article: The Banker (subscribers access)

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