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Monday, 23 October 2017

AJ Murphy's promotion a sign of the times

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  • keith mullin

People who said that AJ Murphy was lured back to Bank of America Merrill Lynch early last year from her short and rather odd-looking jaunt to Goldman Sachs on a promise of future greatness certainly look to have been vindicated. 

CIB head Christian Meissner tapped the highly regarded head of leveraged finance yesterday to run the show as head of global capital markets, as Jim Probert heads out of the firm after 20-odd years.

I imagine running capital markets at BAML is a good gig, given that the firm is a top-three player in capital markets underwriting across pretty much any data cut you look at: a top-five M&A house and a major (US-focused) syndicated lender. I do wonder, therefore, why incumbents don’t last longer in the role. I’m not suggesting anything sinister here; it’s just an observation that running capital markets at BAML does seem to have a relatively short lifespan. Maybe it’s a rotation thing…

Bear in mind Jim Probert was only promoted to run capital markets from his former perch as head of Americas investment-grade DCM in April 2014, a tenure of less than two years. Preceding him had been Lisa Carnoy, who was in the role as solo pilot for no more 15 months before heading to US Trust, the group’s wealth and investment management unit.

Before that, Carnoy (previously global head of ECM and equity-linked) had co-run capital markets with Alastair Borthwick, who had been promoted from running global investment-grade capital markets. That arrangement lasted from February 2010 for a little less than three years until Borthwick moved to run commercial banking.

Prior to that, Bruce Thompson ran capital markets for less than a year before shifting to become chief risk officer, then chief financial officer. Thompson, who stepped down as CFO last year, had run capital markets at Bank of America at the time of the Merrill takeover during the financial crisis and had retained that role post-merger. If you recall, Andrea Orcel, Merrill’s then-head of global origination, went stratospheric at that time gaining a series of master-of-the-universe titles before jumping to UBS in 2012.

Murphy had quit her role, of course, as head of levfi to join Goldman as a partner in a new role of head of leveraged finance origination. Nice. She was back at BAML less than a year later as co-head of leveraged finance, but not for long: she made sole head within months after Robert Schleusner (who had been sole head in the interim) was shunted into a new role as head of wholesale credit.

I’d love to know what really transpired at the time of Murphy’s departure to Goldman with former Goldman man Tom Montag (now COO of BAML, of course) when what looked to everyone like a curmudgeonly Montag refused to grant her garden leave. That was all widely reported at the time and no one really got to the bottom of it all. It’s all water under the bridge, I guess, and there are clearly no grudges as Murphy decided Goldman wasn’t for her and sprinted back to BAML less than a year later. She originally joined BAML in 2009 as head of Americas leveraged loan capital markets from JP Morgan and previously worked at Deutsche Bank.

Beyond the personal stuff, it is noteworthy that another leveraged finance specialist has made it to the top of the capital markets tree at a major firm. It’s certainly a sign of the times.

I’d noted that Goldman’s recent management changes (high-yield specialist Denis Coleman promoted to run the EMEA Financing Group) presaged troubled times ahead, bearing in mind what’s happening to the high-yield complex in general, and the oil and gas sub-sector in particular. If we move into a cycle of distressed work-outs, fallen angels and debt restructurings, the skill sets investment banks will need to bring to the fore are pretty clear. 

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