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Saturday, 23 September 2017

What is it about JP Morgan and Asia?

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I was reminded last week how ridiculous Jeff Urwin’s appointment had been as Asia CEO of JP Morgan by a wag working for a rival firm in the region, who said: “Reading the news reminded me of the big splash JP Morgan made in April about regional commitment. Seems that has lasted less than a year and Urwin is going back to NY. I’m sure you have a view!”…

IFR Editor-at-large Keith Mullin

IFR Editor-at-large Keith Mullin

How cheeky of him, I thought initially. (Well, actually, to be honest what I thought initially was: “Oh my God, what about The House?” More later …) Of course I do have a view! And it’s the same one I articulated back in April at the time of the appointment, which was that it was a thinly disguised and rather pathetic attempt by the bank to bestow false patronage on the region by making a flimsy PR splash about having its head of investment banking based in Asia.

The silly arrangement lasted just six months. After last week’s re-organisation by Daniel Pinto and Mike Cavanagh, co-CEOs of the corporate and investment bank, Urwin will continue with “just” his day job: global head of investment banking coverage, capital markets and M&A.

“Senior JPMorgan executive Jeff Urwin has put his five-story Upper East Side mansion back on the market with a discounted $26 million price-tag”

When JPM originally added an Asia dimension to Urwin’s existing master of the universe titles, I’d written that the bank “would be well advised to reconsider its decision to push so much responsibility onto [him] … If Urwin’s existing role was already a huge one, surely adding responsibility for a region that the bank needs to pay attention to if it is to match its performance in the US and Europe is too much for one person to do single-handedly,” I wrote. Well at least Pinto and Cavanagh took my advice and had the good sense to end the silliness.

So to The House, Just before his six-month holiday to Asia, Urwin had become rather more famous for something other than his rise to investment banking superstardom: the house he was selling in New York. This had been the talk of Upper East Side socialites at chichi cocktail parties. Now far be it from IFR to delve into “Lives of the Rich and Famous”-style coverage but … what the hell, you know you want to know! Well, it appears that Urwin put his “Gorgeous Five-Story NYC Townhouse” – or “Beaux-Arts five-story mansion” to use another description – up for sale.

“Senior JP Morgan executive Jeff Urwin has put his five-story Upper East Side mansion back on the market with a discounted $26 million price-tag,” screamed one headline from February. Wait a minute: discounted? Hell, yeah. Urwin apparently originally wanted US$32.75m for his 8,800-square-foot home when he first listed it in 2008. Yep, 2008. Remember what happened?

“He has now been forced to reduce the price by more than $5 million … the renovated property, at 15 East 80th Street and Fifth Avenue, could be a bargain with its four bedrooms, large garden, media room, 35-foot music hall, private gym and two terraces.” A bargain at US$26m? In case you’re interested – and you know you are – check out the photos.

Going liquid

Recalling that Bear Stearns (where Urwin had worked) had gone bust and been bought by JP Morgan in March 2008, you can guess why he might have thought about going liquid at that point in case things didn’t work out. Ditto in February this year, just before he was heading to Asia to underpin the bank’s commitment to the region. It appears you can learn as much about bankers’ careers from what they do with their houses as anything else. By the way, homes.com estimates the current price of the property at US$25,490,200. You can buy it back, Jeff, and pocket the difference. Probably your best trade for ages.

On a more serious point, being relieved of Asia regional responsibilities means that with the appointment of Argentine Nicolas Aguzin as the new Asia-Pacific CEO, JP Morgan will have had three people in that position in about eight months. Clients must be really impressed.

Now I don’t know Aguzin personally, but stay with me while I run through his trajectory since joining JP Morgan in 1990: corporate banker in JPM’s Buenos Aires office; 1991: cross-border M&A in New York; 1992: investment banking in Buenos Aires; 1996: M&A in New York focusing on Latin American consumer sector; 2000: head of Latin American M&A; 2002: head of Latin American investment banking; 2005: CEO, Latin America region. You getting just the hint of a regional bias here?

I said in April that if the bank is serious about making inroads in Asia-Pacific, it needs to hire an Asia hand, a big hitter who has the relationships that are so key in places like Asia and which can have a transformational impact. JP Morgan’s Asia business is hardly what I’d call shabby, but the bank is not operating at the same lofty levels as it is elsewhere in the world and it’s no secret it has ambitions to stake a larger claim to business in the region. I’m not at all sure they’ve made the right choices here.

Last word on the Pinto/Cavanagh re-org: I was delighted to see that in his grand new endeavour, Urwin is teaming up with Don McCree, global head of the corporate bank, to build a fully integrated CIB franchise. I’ve known McCree for years, from the days he was running around the world doing mega-loans and working on funky LBOs. That was a few crises ago and we haven’t hooked up for a while, but McCree is an all-round good bloke. It’ll be fascinating to see what progress he and Urwin can make.

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