Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: David Livingstone is the City Chief Client Officer, and David
Speaker 2: joins us now for more. David Commooniti, I's going to
Speaker 2: see you. I'm fantastic. Let's talk about where the action
Speaker 2: is at the moment. We've been saying around this table
Speaker 2: for a while that maybe the investment bank in recession
Speaker 2: is over behind us. We want to talk about where
Speaker 2: things are picking up the IPO market. How strong is
Speaker 2: the pipeline for this year.
Speaker 3: It's building, it's solid. But the conditions that you want
Speaker 3: to talk about and that investors are looking at as
Speaker 3: well as issuers are looking at in terms of rate
Speaker 3: out look and not so much the absolute, but particularly
Speaker 3: the volatility in the rate outlook. We're sitting here with
Speaker 3: some of the biggest spread in terms of potential outlook
Speaker 3: for year end rates in dollars that we've seen in
Speaker 3: a while. The issuers are looking at that and saying, well,
Speaker 3: how does that impact not just equity markets, but also
Speaker 3: investor appetite to be investing in IPOs right now? You're right,
Speaker 3: we've seen a very strong last few weeks, particularly in
Speaker 3: the United States, particularly in the healthcare sector. We expect
Speaker 3: those conditions to continue, but a broader rally and deepening
Speaker 3: of the markets I think relies on some of those
Speaker 3: other factors.
Speaker 2: Has there been a structural shift because of what's developing
Speaker 2: a private markets that's maybe holding back companies and basically
Speaker 2: they've decided that I don't need to go public in
Speaker 2: quite the same way they perhaps needed two decades ago.
Speaker 3: I think there has been a shift over decades and
Speaker 3: the growth of private markets, not just here in the
Speaker 3: United States but around the world give alternative capital formation opportunities.
Speaker 3: And you've seen I think the US is the standout
Speaker 3: in terms of the public market still being deep liquid,
Speaker 3: accepting very strong following in sectors with multiple comparables you
Speaker 3: go elsewhere around the world, UK, for example, very challenging
Speaker 3: in terms of the number of companies either leaving exchanges,
Speaker 3: moving to the United States or not coming to market,
Speaker 3: and with IPO levels being very significantly done.
Speaker 1: Speaking of which I have to go there. Zeker came
Speaker 1: to market in the US and New York, which is
Speaker 1: basically an after set of gly Rate them. This electric
Speaker 1: vehicle maker in China did really well, and it just
Speaker 1: raised this larger question of do you still see the
Speaker 1: same degree of cross border IPOs of companies not just
Speaker 1: in China but other places coming to New York. How
Speaker 1: much are people concerned about some of the geopolitics behind
Speaker 1: it versus Hey, a lot of people have money.
Speaker 3: Let's go. I think it's not just a lot of
Speaker 3: people have money, but it's also just the depth and
Speaker 3: quality of the US capital markets. I mean it is
Speaker 3: gapping and significantly ahead of the rest of the world
Speaker 3: if you go around. I've mentioned the UK, but also
Speaker 3: the European markets are not as deep as they need
Speaker 3: to be, Asian markets the same. So I think it's
Speaker 3: that just continued attraction of the quality of the equity
Speaker 3: capital markets here in the US.
Speaker 1: Is there a rival? At this point, we were hearing
Speaker 1: a lot from Paris. You buying that John talking to
Speaker 1: David Solomon, Brian moynihan talking about building out in Paris.
Speaker 1: It's looking better and better from every point of view.
Speaker 2: It was Micron doing the salek and they were doing
Speaker 2: the buying. So are you doing the buying too?
Speaker 3: Particularly in Europe. I'll say that the Europe is the
Speaker 3: place that has to do the most structural chain post Brexit,
Speaker 3: because they need to build capital markets and as you know,
Speaker 3: they've been trying to build capital markets and banking union
Speaker 3: for many, many years now. And what you're seeing, I
Speaker 3: think in France, in the Netherlands, to a certain extent
Speaker 3: in Germany, is member states realizing that they need to
Speaker 3: deepen their independent capital markets before there can be an
Speaker 3: EU layer created. There is too many impediments and so
Speaker 3: what President mccron is talking about is absolutely sensible. And yes,
Speaker 3: Paris will grow, the markets will deepen, but I don't think,
Speaker 3: as to your question, will be a competitor of the
Speaker 3: United States.
Speaker 2: What does that mean for your regional footprint as city,
Speaker 2: Where do you want to be located, Where do you
Speaker 2: want to boost staff, pulled back on staff, given those
Speaker 2: forces that we've just discussed.
Speaker 3: Well, we follow clients and so we've talked about an
Speaker 3: IPO market's obviously a very narrow bits of what we do.
Speaker 3: So our network remains. We operate in over one hundred
Speaker 3: and sixty countries around the world, and we continue to
Speaker 3: see broad opportunity in all of those regions that we
Speaker 3: operate in, So no dilution. Of course, there'll be at
Speaker 3: different times, different areas and more positive growth. Again, I
Speaker 3: come back to the US being with the characteristics of
Speaker 3: not just economic but innovation and some of the stimulus
Speaker 3: that's happening here Europe cautious, but many European clients see
Speaker 3: that as an opportunity to take their own business models
Speaker 3: outside outside of Europe.
Speaker 2: Do you think the US policy makers risks undermining the
Speaker 2: exceptionalism that we talk about every day on programs like
Speaker 2: this with some of the decisions that they're making. I'm
Speaker 2: thinking more broadly, perhaps more narrowly actually around things like
Speaker 2: M and A being unable to really know with any
Speaker 2: real clarity what kind of deal can get done in
Speaker 2: this economy with this White House.
Speaker 3: Yeah, I would make a Governments clearly need to look
Speaker 3: at policy, particularly in terms of foreign direct investment in
Speaker 3: sensitive industries and other things. That's always been present and
Speaker 3: will always be a be a factor. So I wouldn't
Speaker 3: point to one administrative decision. But if you're involved in
Speaker 3: cross border remanade you want to invest it in a market,
Speaker 3: it's the fact that you have to examined, whether you're
Speaker 3: in the tech sector, defense sector, banking, whatever it might be,
Speaker 3: you need to have that really considered carefully. To John's point,
Speaker 3: as you travel around you hear from clients, how concerned
Speaker 3: are they.
Speaker 1: About policies that may change drastically next year depending on
Speaker 1: a change at the White House.
Speaker 3: They're all asking the question. They're all, I think, who's
Speaker 3: going to win and what will be the policy setting.
Speaker 3: And that's very sensible, though, because the news announced yesterday
Speaker 3: in terms of the tariffs that the US is imposing,
Speaker 3: may indicate that actually policy differential won't be that great
Speaker 3: depending on who's in the White House. Of course, that's
Speaker 3: just speculation, but I think looking through that, it's really
Speaker 3: the volatility in the second half of this year that
Speaker 3: a lot of investor clients looking at, and on the
Speaker 3: corporate strategic side, I think people just want to see
Speaker 3: a little bit more certainly. You'll talk about that range
Speaker 3: of potential outcomes on monetary policy around the world, but
Speaker 3: they want to see a little bit more certainty in
Speaker 3: the fiscal situation and also that policy setting. So they're
Speaker 3: not making big decisions necessarily leading into the election, but
Speaker 3: they want to be as informed as possible about what
Speaker 3: it might be straight after.
Speaker 1: How are you preparing, given the fact that you've had
Speaker 1: clients in a lot of different countries, potentially even in China,
Speaker 1: at a time where we're going to get potentially a
Speaker 1: big disruption. How is that informing some of the restructuring
Speaker 1: that city has done in terms of not just the
Speaker 1: footprint and where you are, but how you are arranging
Speaker 1: your sweeter products.
Speaker 3: So nothing about our reorganization, not restructure, but nothing of
Speaker 3: our reorganization that we've executed over the last number of
Speaker 3: months is to do on our geographic footprint. Indeed, we've
Speaker 3: reconfirmed the importance of our sort of global network and footprint.
Speaker 3: So what we have done though is sharpened our ability
Speaker 3: in our focus of our businesses and also the capabilities
Speaker 3: that we have to address clients needs is make sure
Speaker 3: that they're direct. Did very clearly towards the client. So
Speaker 3: where that network, that footprint and some on and that
Speaker 3: products that remains unchanged from what we had previously.
Speaker 1: So you said that the reorganization has been largely completed,
Speaker 1: and yet there have been a number of recent access
Speaker 1: and I'm wondering how difficult it is to really retain
Speaker 1: some of the top talent at a time of turn
Speaker 1: of change, which is always tough.
Speaker 3: It t is tough. I'd say that what we announced
Speaker 3: yesterday in terms of two senior retirements of t D
Speaker 3: col and Mike Whittaker absolutely planned all part of the
Speaker 3: execution the Jane Fraser, our CEO, had in mind. So
Speaker 3: this was normal, unexpected. But I go back and say, actually,
Speaker 3: our ability to attract very senior talent is high. Andy
Speaker 3: seeg who joined to run our wealth business, Tim Ryan,
Speaker 3: who announced yesterday will be joining us as had of
Speaker 3: technology in business enablement. This is very, very high quality talent.
Speaker 3: This Ragavan who's joining us shortly to run our banking business,
Speaker 3: top tier talent. Attracted a city attracted to the opportunity
Speaker 3: in the platform that we have.
Speaker 2: What do you think changed? Do you think something has
Speaker 2: changed to attract that talent? Is it something as simple
Speaker 2: as the stock price performance, which is up more than
Speaker 2: sixty percent is the end of October because silly stock,
Speaker 2: as you know, without being too critical for a lot
Speaker 2: of people, has been dead money for a long time
Speaker 2: starting to perform. Is that attracting talent? What is it
Speaker 2: that's changed for you?
Speaker 3: I think you need to go well above the share
Speaker 3: price for it. I think it's clarity of strategy, and
Speaker 3: I think our chief executive has set out a very
Speaker 3: clear strategy, made some very clear decisions in twenty twenty
Speaker 3: one in terms of some of the business activities that
Speaker 3: we would discontinue, and being really clear through this reorganization
Speaker 3: of the accountability that she wants the businesses to have
Speaker 3: but also to perform, and that I think is the
Speaker 3: factor which is attracting this talent.
Speaker 2: Language is important. You keep saying reorganization. What is the difference?
Speaker 2: Just help me understand between a reor and a restructuring.
Speaker 3: I think restructuring implies that you're changing fundamentally your business mix.
Speaker 3: Also implants that you might be sort of divesting in
Speaker 3: certain things. It's not. We've had a management reorganization, so
Speaker 3: our structure catches up with our strategy and we have
Speaker 3: a much simpler management structure than we had previously.
Speaker 2: Seems to be pay enough big time based on the
Speaker 2: share price performance, because that's what I focus on. Setties
Speaker 2: up this morning, or rather down just a little bit,
Speaker 2: but over the last six months or so, pretty phenomenal
Speaker 2: price sanction there, David, Thank you, sir, good to see you.
Speaker 2: Thank you very much. David limitson that of City