00:00:02
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is Masters in Business with Barry Ritholts on Bloomberg Radio.

00:00:17
Speaker 2: This week on the podcast What a Fascinating Conversation. Felipe o Gory is co head of Global Banking at JP Morgan. He has started in London and eventually moved over to Hong Kong, where he worked for thirteen years before coming recently to New York. He's seen just about every aspect there is when it comes to commercial corporate investment banking around the world. I thought this conversation was quite fascinating, and I think you will also with no further ado JP Morgan's Felipe.

00:00:51
Speaker 3: O'gory, thank you for having me.

00:00:53
Speaker 2: I'm fascinated by the mispronunciation of your name, Philippe o'gory. Did the people when Hong Kong really think you we were Scottish or Irish at the beginning when I just moved to Hong Kong, people were surprised when I arrived there because the way they pronounced my name and surname it sounds more.

00:01:12
Speaker 3: Like Philip Ogori, so they were expecting an Irish or a Scottish person. Then they had an Italian, so they had to adjust to that.

00:01:19
Speaker 2: That's very that's very funny. So let's roll a little back. Before Hong Kong you get your Masters of Science and Economics zumma cum laude from is that Boconi or University in Milan was markets and investment banking always the career plan.

00:01:37
Speaker 3: Absolutely not the plan, well, not that I really had any plans back then, but my passion was and still his history. So my idea was I was gonna I grew up in rural Tuscany and I'm the by product of the Italian state education. So you have you take your high school exam at the age of nineteen, and then you applied to university. So in the three months between finishing high school and deciding where you go to university, I thought I was gonna go and study history in Florence. But my dad, who has been a central figure in my life, and it suggested to me, why don't you apply to Boconi University. I didn't really have an idea what it was, and I only knew it was in Milan, and maybe more to please him, I took the tests and I went on with the rest of my holidays summer holidays, and then I got accepted to Boconi and I decided to go there, but with no real plans.

00:02:50
Speaker 2: Back then, well, you mentioned you were a history thinking about going into history. You taught classical civilization in the UK. Tell us was the academic career ever in the cards.

00:03:05
Speaker 3: Yeah, so when I when I finished with Boconi, I thought I was going to do I graduated in economic history and I thought I was going to do a PhD in that in that in that topic. Back then there was a rule whereby you are not allowed to move from master to PhD. Story the way, you need to work for a couple of years and then you apply for the for the pH d. And thefore it made sense to think about, okay, you know what, I'm gonna remain in academia as I started thinking about the dissertation that I that I will work on for my PhD. And therefore I, for a variety of totally strange reasons, I ended up as a teacher in North Yorkshire in an English college, teaching Italian as a foreign language and classical civilization too. And and then by you are chance, I stepped into the opportunity to apply to JP Morgan and I applied to JP Morgan and kind of I've never left since then.

00:04:11
Speaker 2: That was London in nineteen ninety nine. Yes, so first you start, did you start in markets or an asset management or banking?

00:04:22
Speaker 3: I started, that's a very good question. I started in a graduate program back then. So I joined jupy Morgan pre merger which Chase. It was a tiny back then global institution of around fifteen thousand people globally, think about now we have three hundred and thirty thousand. We had lost the covert raising back in the middle of the nineties and it was a bank they had was trying to find it, so its roots back. So we were not one of the five broker dealers that were the shining object of the era. We were probably a tier two of not theater institution back then. And I joined in a graduate program called internal Consulting Services. The idea was they were hiring the most diverse people with the most diverse of the backgrounds, hence somebody like me to work on a variety of different things, including the Internet, which was something that was coming to be back back then. So they hired me and the idea was you would rotate in this graduate program every three months on a different in a different part of the firm, so you learn how the firm operates and you can decide how you can help interjecting Internet into all of this. My first rotation was in asset management. My second rotation was in CRM Client Relationship Management, believe it or not. And then as back then literally the world was so small, they say, okay, suddenly they need an analyst in the Milan office to do effects seeds. They look around, they say, who is the last Italian who has joined us? Well, somebody says, there's this guy in I've seen him around. So they called me up and say, okay, do you know one plus one? Kind of that was the interview, say okay, you moved to Milan to do effects seeds. So that's how we moved to markets to do effectsis and then things the merger which has happened, they brought me back to London. I moved to the rivatives and I grew up in the mark on the market side of the business.

00:06:34
Speaker 2: So London to Milan and then what brought you to Hong Kong in twenty thirteen.

00:06:39
Speaker 3: In twenty thirteen, that's another interesting story. So we need to wind the clock back. It's twenty twelve. I'm in discussion. I've been running SOUDI in Europe for quite some time when with a friend who was my co head back then, and and the opportunity to move to New York started to develop. So I discuss with my wife, who back then was working at Bank of England, whether she can be seconded to the FED and so on and so forth. So the conversation starts happening as okay, you know what, after twelve years or thirteen years at the firm in London, we're going to move to New York. And then suddenly May twenty twelve London whale happened and the decision will say, forget about it, you stay put. Back then, my wife said to me, please, please, I know that Asia is not on your cards you want to move to New York, but if there is ever the opportunity to move to Asia, please promise me that you will consider it. And as every Italian man do, of course, Darling absolutely So roughly a year later I get a call and and from my boss then said okay, Daniel Pinto was our the see of the CIB back then, it wants to see you tomorrow to discuss about an opportunity to move to Hong Kong. Don't don't see to it thinking it about too much. There's an external there. They're considering somebody externally too, So make up your mind pretty quickly, so as you do in those circumstances. An Italian man, I, whether did. I sent a text to my wife and the text was something along the lines darling, maybe tonight after dinner we should have a conversation because there is an option to move to Asia, but itally unlikely. I'm not so sure, she replied. Five minutes later, tell them that we're going. So the following morning, when I went to interview with the boss, say that's fine, whatever than you, We're going. So, literally, I moved to Hong Kong. I never been to Hong Kong in my life.

00:08:53
Speaker 2: Wow.

00:08:54
Speaker 3: And I've never been to Asia in my life. But the family was happy or exces so it was a family adventure, so we took it like that. Literally. The further ist I had been was India, but I'd never been to Asia when I moved there.

00:09:12
Speaker 2: Why was your wife so enthusiastics and Asia? Had she been before?

00:09:16
Speaker 3: She had traveled around Asia definitely already she had been to Japan and other parts of the region.

00:09:23
Speaker 2: And pen and Hong Kong very different.

00:09:25
Speaker 3: Very different, and she won. She said, it's the right time. We were both late thirties, the girls were still young. Life is about the journey, and before it was the right thing to do. Interestingly enough, from a career standpoint, was a totally non traditional choice. And everyone was saying to me, you're going to come back in a body bag or there was this Acronymy filth failed in London Hong Kong because there was a little bit idea back then that if you were not good enough to operate in Europe, they used to ship you to Asia, back from the colonial days.

00:10:12
Speaker 2: I was gonna say that might have been true fifty years ago, well, but in the nineties and two thousand.

00:10:18
Speaker 3: Well still there was that view. So but we went there and we loved it. We absolutely loved the Hong Kong to the point that we spent twelve years there.

00:10:28
Speaker 2: Wow. So obviously there's a bit of culture shock, but I'm really interested in what was it like being an Italian who worked in London now going to an entirely different culture, different way they do business. How challenging was that transition.

00:10:49
Speaker 3: It was interesting in the sense that I thought the new diversity because back then I was running Southern Europe. Italyis paying Greece and Portugal, which although common there are commonalities from a cultural standpoint, they are a different way of doing business. And I know that for US and Italian and Spaniards are not the same things, the same thing. But largely the reality is that we have we have a lot in common culturally. So you move to Hong Kong and you run a region of sixteen sixteen seventeen countries that is truly, truly diverse. And the best definition that I got of Asia was it's a conglomerate of countries that happens to share the same time zone.

00:11:36
Speaker 2: But that's it.

00:11:37
Speaker 3: And even that definition is wrong because if you think about well into And in New Zealand and Mumbai in India seven and a half hours, so it's wider than the US, So they have really nothing in common. So you spend a lot of time try to understand how the business operates around you, and there is no way that you manage to do it unless you put the experience. You put the years. So after twelve years. I feel I am comfortable in understanding how Asia operates, but it took me truly a long time.

00:12:14
Speaker 2: So I was going to ask you, say, how Asia operates. But sixteen different countries, different regulations, different ways of doing business, different cultures, different languages.

00:12:25
Speaker 3: Absolutely, So let me give you an example. You go to Japan, it's not so important what is said in the meeting, but what is not said in the meeting and how it is and the concept of face and how things operate. You go to Australia at the opposite end of the region, and it's very much in your face. They tell you very clearly what they think of you, and so on and so forth. And then you have between these two extremes you have every shape and things. So it takes time, but it's fascinating and I loved the getting to know the culture, getting to know their history, getting to know quote unquote the biases, getting to know the opportunities and if you think about it, and this is probably not well known, but by most likely by the end of this decade, fifty percent of the global GDP will be housed in Asia Pacific and the second, third or fourth largest countries from a GDP standpoint will be.

00:13:30
Speaker 2: Asians, China, Japan, Korea is.

00:13:33
Speaker 3: Now China, India, Japan.

00:13:35
Speaker 2: Most likely South Korea doesn't make the top South.

00:13:38
Speaker 3: Korea doesn't make the top four.

00:13:40
Speaker 2: Really really interesting to say nothing of Taiwan, and obviously Vietnam and other countries.

00:13:47
Speaker 3: Are Australia, which is a continent in itself with all the peculiarities. So it is a remarkable, interesting region that is not well understood both from an opportunity standpoint and the challenges standpoint, And it's interesting. In Chinese. The sign for opportunity and challenge is the same.

00:14:12
Speaker 2: Really really interesting. English the universal language over there, or was so when you're when you're in obviously Australia New Zealand is going to be easy, but when you're in China or easier. Two people separated by a common language. Is the old joke about America and the UK. But what was it like trying to communicate in places like, you know, Thailand or Vietnam or the Philippines.

00:14:42
Speaker 3: English is in Southeast Asia, English is more widely used for historical reasons. Think about Singapore, Thailand and some of the alone Malaysia and so on and so forth. In North Asia, it is not as widely used, and therefore you need to learn how to communicate through two translations or the whole ritual that there is at times related to the translation, and at times, especially in the mainland in China, even in meetings where your audience will speak English, the meeting will be held in Chinese with the translations. So there is a whole understanding on how you operate in those countries that is complicated.

00:15:39
Speaker 2: So you've said that the corporate outlook has remained very resilient despite it seems like an endless run of geopolitical uncertainty. We've had tariffs, we've had wars, we've had inflation. What are people in various regions doing to cope with and what underlines this ongoing resiliency.

00:16:04
Speaker 3: So the resilience is probably one of the biggest surprising factors of twenty twenty six. If you think about what has been put through the global economy in the last couple of years, the global economy has been exceptionally exceptional resilient. This is through of the world. Then, depending on where you are around the world, clients are focused on, regulators or governments are focused on different topics. So if you start, for instance, with the US, clearly the economy is doing fantastically well and there is a sense of how can we continue to dream about outcomes that were not even possible a few years back, and how we can participate in this incredible engine of growth at this super resilient economy. There are some concerns around inflation. Every now and then you hear people talking about it, but generically, and this tells a lot about the cultural attitude store of different places in the world. Here there is a sense of optimism that is clearly, clearly palpable. You move to Europe and the environment is resilient. Europe is doing to a certain extent better than at times we give it credit for, but it is preparing for a heavy electoral cycle that will come next year. Italy will go to election, the parliament will come to an end next year, so we'll do France and the UK most likely will have a new prime minister after the summer. So there is already, as you go around Europe a sense of we are beginning the electoral cycle. There is concerns around inflation in Europe spilled over from from the Iran crisis and how would that prompt acy be which has already high grates, and how would that shape the European economy. There is a war on the eastern border with Russia, between Ukraine and Russia that is impacting the rest of the of the region and it's shaping the way leaders and business leaders are thinking about the future. And there is to a certain extent a sense of admiration looking towards the US and the sense of there is is there more that can be done to make Europe like the US. Then you go to the Middle East. Clearly, the Middle East is still recovering from what's going on, but that part of the world is for sure the winner in a global South narrative for a variety of different reasons. In the Middle Easts it will remain a winner of the global South narrative for a variety of different reasons. Noway standing the geopolitical headwinds, and you can see the investments that are still going there and they will keep on going there. There is an infrastructural shift in the way the Middle East thinks also in building infrastructure that is fundamental. Then you go to Africa, which is a supremely important content for a variety of different reasons, very probably the most extreme in terms of dealing with countries in which we are not really used to. We have presence, in a large presence South Africa, in Nigeria, Kodawara and Kenya, and there you see importance of critical minerals, the importance of urbanization, the demographics that are exceptional in favor of that part of the world. So while for the past decade and this decade, Asia has been a fundamental part of the global economic landscape, we need to start thinking that after the Middle East, Africa will become the next big thing, and then you move to Asia. Asia to a certain extent is not up and coming. It's really arrived. I already mentioned second third and fourth largest economy in the world, and there it will be a matter of dealing to a certain extent with the geopolitical winds. Sometimes the blow in a direction, sometimes they blow in a different direction, the strategy strategic angle of that part of the world. There is a narrative out there that globalization is finished. I beg to disagree because the economy is al so intertwined and if you see how much manufacturing happens in Asia, it is very difficult to reach. It doesn't mean that you should not try, but shift in supply chains takes years, if not decades, so that part of the world will remain fundamental. And there you have Japan that is exceptionally well performing and it's super interesting. You have China that remained supremely interesting from an opportunity standpoint and the way they're changing their own economy in that sense you mentioned Korea. Think about the importance of Korea from a memory standpoint for the AI ecosystem. Then you have India, you have Southeast Asia, you have critical minerals in Australia. So different parts of the world are dealing with the current set up in different ways. And you have probably the two extremes. If I think about as with Europe in the center, US and Asia really gunning for growth, while Europe is still trying to figure out a way to grow more in this current environment.

00:22:03
Speaker 2: So we're going to talk a whole lot more about Asia in a bit, but I want to circle back to the Middle East and to Africa. When you say I think a lot of us think of the Middle East as just a collection of petro states with sort of Israel in the middle and then whatever geopolitical turmoil surrounds that structure. It sounds like you're looking at the Middle East more as not only a changing set of infrastructure becoming a financial center. What else is happening in the Middle East. That's huge change.

00:22:41
Speaker 3: Part of it. You mentioned it already. It is becoming a more relevant financial center for sure. The uas are becoming much more important from that standpoint, and you can perceive when you go there the degree of investments that are taking place from global players positioning themselves over there. Then there is the whole set of investments and reform to the economy of the kingdom and how that is shaping the changes of Saudi into the future. And again it is remarkable the changes that you see happening day to day over there. Then you have Katar, and there is an enormous infrastructure play taking place in that part of the world. Typical solid infrastructure, but there is also digital infrastructure that is taking place over there. Think about energy and how fundamental is energy for data centers, and that part of the world becomes super fundamental from that point of view too.

00:23:56
Speaker 2: We used to think of finance centers as New York Lund in Hong Kong. Do we add Dubai to it is Dubai in that.

00:24:05
Speaker 3: I think you need to add Dubai and for sure Singapore two. You cannot forget Singapore, And to a certain extent, I think Tokyo still is a fundamental player, especially in the equity markets globally. Those are the ones that in my mind I would consider fundamental. And then if you allow me, there is also Europe continent to Europe, and so there are a few centers there.

00:24:33
Speaker 2: So we're going to circle back to Europe also. But last question about this area, I have to ask about Africa. We all know about rare earths and other minerals. Africa stands out as one of the few regions who isn't going through the same sort of fertility crisis that we're seeing in the rest of the world. Is that a driver or is it something more fundamental than that.

00:24:57
Speaker 3: I think you have what you said, demographics and urbanization are super fundamental. Then you have the richness in critical minerals. And I would add that Africa to a certain extent has probably been not ignored, but not on the radar screen of the Western world for too long, to the point that Africa, as the influence in Africa is heavy from Russia, by Russia and China. So I think it's now our interest to make sure that the Western world understands Africa and operates over there. For a variety of different reasons, Africa is the southern border of the European Union, and it is fundamental, and it is not well understood. For instance, how at times Russia does not only create problems for Europe from an eastern border standpoint, it creates problem to Europe from southern border standpoint by operating in some of the Sahara in Africa African countries and pushing immigrants towards the shores.

00:26:08
Speaker 2: Of Europe, which has been a problem in Europe. It LEDs to Brexit. It's a problem here in the United States, whereas I should say it's an issue, not so much a problem, but.

00:26:17
Speaker 3: It's starting from the assumption through the Europe as an aatality or a demographic issue, and therefore we need to figure out a way to increase population or accept that Europe needs a certain degree of immigration. How to do that it is not well understood.

00:26:42
Speaker 2: It seems to be a function of wealth that when a country hits a certain per capita income, people have options and they tend to have less less children. Is anything going to change at or is that just the way it is?

00:26:57
Speaker 3: I think some components of it the results. So I don't think it's only wealth. It's also cultural. If I look at Italy, which is a wealthy country in itself, although relatively small if you think about it, less than sixty million people live in Italy. Italy has been in a demographic crisis now for forty years and at the current pace, there will be no more Italians in just over a century. And Italy is also losing a lot of talent. Every year, between one hundred and fifteen, two hundred thou young Italians leave the country to go and work somewhere else. So there is a lot of it that is cultural too.

00:27:48
Speaker 2: Really really interesting. Coming up, we continue our conversation with Filippo Gorri, co head of Global Banking at JP Morgan, talking about the growth of JP Morgan into a powerhouse. I'm Barry Ridults. You're listening to Masters in Business on Bloomberg Radio. I'm Barry Redults. You're listening to Masters in Business on Bloomberg Radio. My extra special guest today is Filippo Gory. He's co head of Global Banking at JP Morgan, having joined the firm in London in nineteen ninety nine. He has since relocated through Hong Kong to New York. So you've had really such a unique perspective. You've led businesses in Asia Pacific, in emerging markets, in London and now in New York. Do you have to adapt your leadership style or your strategy when you move from one region to another.

00:28:56
Speaker 3: Absolutely, this part of the exercise of going into the job. One of the things I've learned early on in my career. You cannot have the same leadership style with every colleague. That was particularly true in Asia, where if you use the same tone, tone of approach to a Japanese colleague or an Australian colleague, for sure you missed, you get it wrong in one of the two cases. So you need to adjust how you react to your colleagues and your clients. And you're just your your communication, your delivery, what's important, how you delivered the importance of certain things and so and so forth. I'm still trying to figure out the US full disclaim.

00:29:42
Speaker 2: Well, I'm curious, I'm going to assume New York is more like Australia than Japan. Absolutely, but I would also imagine a lot of differences from London.

00:29:52
Speaker 3: Absolutely. London is very much understated and it's there is a way where a way in which you say something but without really saying it out right.

00:30:04
Speaker 2: And New York is pretty much the opposite. Absolutely, no mencing words.

00:30:09
Speaker 3: Yes, so it's been interesting so far.

00:30:12
Speaker 2: I can imagine. So your charge is global banking, yes, And when I think of that department, that's everything from investment banking to corporate services to commercial banking. How do you get all those lines of businesses to collaborate as opposed to compete. It seems like all horses are pulling in different directions.

00:30:36
Speaker 3: It's actually the other way around. So it's Global banking is three lines of business corporate banking, sorry, commercial banking, corporate banking and investment banking. They have been put together under these global banking umbrella that spans forty six countries, around two hundred major locations around the world, and let's call it around seventy thousand clients give or take. And the idea is you cover all the wholesale banking businesses under one umbrella. So from every corporate that makes at least twenty million dollars of revenues and above less than twenty million dollars, it's called business services, business banking, and it belongs to Chase. So you're still using the branches the moment you qualify, let's say, from a revenue standpoint or size of business standpoint to the wholesale part of the firm, so you become part of JP Morgan. Then the whole client continuum is covered by the same management team, the same group of leaders, with the same group of the same rules, the same capital location, and so on and so forth. So it is becoming particularly important, especially in this day and age. Think about the innovation economy, whereby a corporate or a startup up graduates to become a multi billion dollar corporation supremely fast nowadays. In the past it could take twenty years thirty years for a corporate to grow through the various stages of life. Here it's kind of from cradle to infinite at the speed of light. At the speed of light, so it is important that the transition and the support happens within an homogeneous management and the same way of looking at the clients.

00:32:29
Speaker 2: So JP Morgan emphasizes technology investment and the importance of artificial intelligence. What parts of banking is AI changing, What is very much ahead of the curve? And what do you think are the areas that are most ripe for disruption?

00:32:48
Speaker 3: So it is very difficult to assess whether you are ahead of the curve or ahead of the park, or whether you're just doing what everyone else is doing because things are changing so rapidly. That is, I would not dare to say, oh, we are ahead of the curve. We are investing is a giant liap of mankind in terms of revolution that is happening under our eyes. There is clearly efficiency that can be achieved through the use of AI processes and procedure and tools so that you can provide better client service or best better customer service while being more efficient, which means that you can probably cover more clients. And our ambition is to cover more clients, let's say, to reach one hundred thousand clients by twenty thirty in a more efficient way. So technology and quote unquote AI are helping us scale in the business through much faster than before and ideally without having to increase the.

00:33:54
Speaker 2: Costs really interesting. I think we all are aware that AI is changing everything so rapidly. Where do you think human judgment is irreplaceable? What part of the businesses? Hey, we could become more efficient with AI, but the ultimate decision maker has to be a person.

00:34:17
Speaker 3: It's fundamental that the human is in the loop because for a variety of different reasons. Ultimately, I would simplify this way, you are dealing with clients. Clients are human beings and at the end of the day, I think a client wants to hear, wants to be dealt with through a client, through a person. So the human in the loop remains fundamental. It can help speed up some processes, can help achieve better scale, but the individual remains fundamental in our business.

00:34:54
Speaker 2: So when you join JP Morgan back in nineteen ninety nine, you mentioned was not in the top of the league tables. What was the reason that it managed to break into the top tier? Was it this emphasis on technology investment? Was it a strategy? What led the firm to becoming, you know, a global top tier back?

00:35:20
Speaker 3: Okay, So I think there is an obvious answer and then there is a less obvious one. I would say the obvious answer is Jebby Morgan Chase went through a series of merger including acquiring Bankwan in two thousand and four. They brought to the firm a certain Jimmie Diamond who changed the way in which the firm operated. I think back then the Jebby Morgan Chase Bankuan merger was still a conglomerate of institutions that I merged together over the previous twenty years, and many of those mergers have not actually been fully execute You had many Handey merging into Chemical merging into Chase. You have First Chicago merging into Bank One. You had Jami Morgan and a variety of different things. I forgot Cousin of there was Cousinov in the middle too, so you integrate. The integration of all of these was a fundamental piece that made us who we are today. And Jamie was the leader and the individual that could see could have the vision of how to do this and create the fortress balance sheet and everything else that came with that. They made us who we are today. I think the less obvious answer is we went through two thousand and seven, and I hope I'm not being controversial here, but probably we were still busy with the merger and everything else, that we didn't have time to focus on some of the other staff that then cause the problems. And Jamie's view was very clear, we do things that make sense for the customers, We do things that make sense for the firm, fortress balance sheet, and so on and so forth.

00:37:17
Speaker 2: If I recall correctly, I want to say it was around five There was a minor little subprime issue with JP Morgan, long before it was a problem everywhere else. And if I remember correctly, Diamond said, get all that crap off our balance sheet. We don't play in that sort of speculator of waters. So when the real troublehead in eight oh nine, they had a very clean balance sheet. So that's a factor.

00:37:49
Speaker 3: And then since then, investing, investing, investing, investing, and investing again. Through the cycle, you invest, you keep growing. You're growing not because you like it per se by, you're growing because you can provide best, better customer service. You work towards the betterment of the communities where you operate, and you keep investing, investing, absolutely through the cycle. So when I arrived in Asia in twenty thirteen, the firm wide revenues that we made in that year are less than what we made in this quarter in the first quarter of this year. What has happened there has definitely been the growth of Asia. In the meantime, that's been also US investing in the region across products, countries and jurisdiction, so that if you build the infrastructure, then you are there to serve the clients, the business will come interesting.

00:38:46
Speaker 2: What does one firm mean in practice? The big motion towards JP Morgan one firm? At what point are you in the middle market when it's become a global enterprise or public market markets to explain the thinking behind it.

00:39:02
Speaker 3: So, the thinking is you want to make the organization is huge. It's three hundred and thirty thousand people. So the idea is to make the company feel small to our clients and to a certain extent to our employees.

00:39:17
Speaker 2: In other words, you don't want scale to be a disadvantage.

00:39:20
Speaker 3: Absolutely, because when you have three hundred and thirty thousand people may be dejected that you associate with us is not nimble. But we try to be make the firm feel small to our clients, to our employees, to the communities and everything else. So we try to maintain a personal and human angle in everything we do.

00:39:43
Speaker 2: And you've now been at JP Morgan twenty six almost twenty seven years. Kind of unusual these days people staying with one firm.

00:39:51
Speaker 3: I'm one of the new kids on the block at the firm that people that have been really Yeah. Absolutely, that pattern I think is going thirty seven and many of the other seniors my co had, John Simmons, I think is just it's crossing thirty four and many of the other folks around me are in the same zip code, if not spent more time than me.

00:40:15
Speaker 2: So what keeps you and these folks at the firm for so long?

00:40:19
Speaker 3: I think the people and the culture. So you'll for me, Jopy Morgan became part of me and my family. And you stay because you like the people, You like the environment, like the you like what you do on your day to day. But fundamentally, I think the people.

00:40:37
Speaker 2: And you mentioned three hundred and thirty thousand people. How big can JP Morgan chase sked? Is this going to be a half a million employer sometime soon?

00:40:49
Speaker 3: I think from a scale standpoint, we are where we need to be in terms of people. The idea is, can we use AI to grow the business without having to grow the footprint much more.

00:41:02
Speaker 2: So this is probably it for the next decade.

00:41:06
Speaker 3: I would I mean, I'm not Jamie, so you should ask the question to Jamie. But from a global banking standpoint, yes, I think that they had come that we have. Now we are trying to try to keep it stable for the next few years.

00:41:16
Speaker 2: Huh really really interesting. Coming up, we continue our conversation with Filipo Gory, co head of Global Banking at JP Morgan, discussing the state of capital markets today. I'm Barry Ritolts. You're listening to Masters in Business on Bloomberg Radio. I'm Barry Ridolts. You're listening to Masters in Business on Bloomberg Radio. My extra special guest today is Filipo Gory. He's co head of Global Banking at JP Morgan, where he been working since nineteen ninety nine in London, Hong Kong and now New York. So we touched on this earlier about resiliency in the face of all this macro volatility. But it's not just the economy. It's been a ton of m and A and deal making, and this year we've seen a lot of IPOs and giant IPOs at that why is all this holding up so well despite all of the geopolitical turmoil, We say, I.

00:42:35
Speaker 3: Think there is a variety of different things. For a certain extent, there was a little bit of a pipeline that have built over the years that needed to find.

00:42:46
Speaker 2: It had slowed down post pandemics.

00:42:48
Speaker 3: A wow, exactly so IPOs. We thought twenty twenty four they were going to come back. Then twenty twenty five finally we see the return of the IPOs, which is kind of as good as a component of cyclicality. It's the right time for this to help M and A. I think there is probably an extent of what we discussed earlier on boards are observing the resiliency of the economy, of the global economy. They think it's the right time to make strategic decisions. They're probably getting comfortable that the cost of capital will not go much lower than where it is now. Probably there's a sense of higher for longer to a certain extent, and therefore people are getting the hands thirty in terms of dealing, and we are just witnessing what could be from a wall let standpoint, in pure investment banking, if not the best every year, which was twenty twenty one, very close to be the best evy in terms of volumes.

00:43:56
Speaker 2: Probably the biggest change over the past decade has been the rise of private capital, whether it's private debt, private credit, private equity. How is that changing a global bank? Do you guys look at this as competition or is it expanding the range of solutions you can offer the clients.

00:44:15
Speaker 3: It's it's a little bit of both. So private capital as plays definitely a rule in the everyday economy in the sense of after the GFC, for traditional banks, a certain sector in certain cases became harder to deploye capital and therefore to a certain extent, there is a group of clients that are right to be the beneficiary of the private credit because simplicity of solution, the unit trunche and so on and so forth. So that has caused the growth of that sector. And we have been operating. We've been doing loans, a private loan is just another form for two hundred and twenty five years. So we launched our own initiative, our loan private created business back in a few years back, but we increased it last year officially around Februar last year to fifty billion dollars of our own capital are located to it. And the idea is, when you go through a client, you try to offer an agnostic set of solutions. We can do anything you want, from the traditional private lending solutions to more innovative solutions to the traditionals syndicated financing facilities, and so on and so forth. So the idea is to offer the clients all the potential tools in the GP Morgan armory.

00:45:51
Speaker 2: So these private transactions have been rising really since after the financial crisis. What does this tell us about public market m and A. How do you look at the difference between all these public companies or I should say these few public companies and this rising number of private companies.

00:46:14
Speaker 3: It's a trend that that's been going on since the nineteen eighties. The number of public companies in the US or around the world has reduced substantially since then. There's a couple of there's various reasons for that. Part of it could be the cost associated with being a public company. Part of it could be the fact that some of the companies have grown in size and have acquired some of the smaller companies and so on and so forth. I am absolutely in favor of unhealthy public market because it's one of the greatest strengths of the United States, the fact that there is a market out there where you can raise capita, you can finance yourself. There is a discovery price mechanism which I enormously love if I can. If I look at other countries where I've operated, and the size of those public markets are small, you see that those economies a struggle to gain scale, struggle to gain opportunity. So for me, the public market in the US is a treasure that must be.

00:47:24
Speaker 2: Cherished fair enough. We've seen a number of mega deals happen over the past couple of quarters, including the giant SpaceX IPO. We have Enthropic coming up, there's a bunch of other ai IPOs coming up. But there's also been a lot of merger activity in that space. What's driving these big transformative.

00:47:50
Speaker 3: Deals, as I mentioned to a certain extent, is perception of stability of the cost of financing, opportunity for the regulation that will make some transaction possible, and I think the backlog that are been created over the years, But in general, the boards are very sanguine around it is the right moment let's take the opportunity, let's transform. Many boards are also looking at what's happening with the eye and thinking that, okay, it's a copernical revolution that is happening. Therefore I better be ahead of it and take the opportunity with this and so on and so forth.

00:48:37
Speaker 2: Otherwise you're behind. So your charge is global. You get to look around the world at opportunities. I'm curious, how do you measure where opportunities are greatest? Is there specific data points you're looking at, like volume of I pos or mergers? How do you look at the world reagion by re then figure out, hey, we need to spend more time and capital in region XS.

00:49:06
Speaker 3: So what we do is this is a constant process whereby we challenge ourselves consistently as cib Commercial Investment Bank Management team, and we say, okay, we operate in forty six countries. Should we operate in five more? And if so, okay, which one do we look at? What is the opportunity? Why does it strategically make sense to invest more in that country versus another? Or why don't we invest more in an existing country? And so and so forth, Betting in mind that one of the fundamental ways in which we look at the world is the following. We have never left a single country since we enter it. So being in a country it is not the same thing as owning a share or a stock. You don't like it anymore, you sell it. Once you make the decision to enter a country, you are there forever because you're there for the employees, for the clients, for the communities, the regulators and so on and so forth. So we think about that very carefully. We look at some micro trends. We try to understand where the world is going, where the opportunities are coming. We ask our clients. Some of our clients are some of the largest companies in the world, and you try to see they think how they operate. Can we support them everywhere around the world where they operate or not? Or similarly, there are companies that are developing some of these countries. They want to go global. Can we support them in that case? So that's kind of the exercise that we do, and we look at it collectively as CB management team across the various products, whether it's banking, whether it's payments, whether it's markets, security services, and we collectively make a decision on where to invest, and we do it on a quasi regular business. We discusses.

00:50:57
Speaker 2: So I want to talk about the EU and a Asia. But before we dive into those areas, any other areas of the world that are presenting a great number of opportunities.

00:51:10
Speaker 3: Well, Latin America for sure, we have America. Yeah, we have not discussed about it. But if you think about Brazil and Mexico for sure are super interesting market, super important for us, and and they are at the doorsteps of the United States. So uh, it is fundamental that we have a critical presence over there and that and we keep on growing it.

00:51:33
Speaker 2: And you mentioned earlier you think the European area is almost overlooked, that they're on the verge of the next phase of growth.

00:51:46
Speaker 3: So what it meant is there is generically a degree of pessimism around Europe. The pessimism comes from the fact that the growth of the European Union in terms of GDP growth theory, has been anemic for now, call it twenty five years. It grows zero point five, zero point seven, maybe one percent, and we consider ourselves lucky. And that has been one of the challenges. Because growth brings jobs, growth brings wealth, growth brings all the things that I see here in the United States at the same time as a European I always want to remind folks that Europe at times is not widely understood. The European Union concept was not born out of idea of an economic union. It was born out of the dream of the founding fathers of the European Union not to have war on European soil.

00:52:48
Speaker 2: Ever, again from a securities perspective, not economically.

00:52:52
Speaker 3: It was actually they were visionaries. If you think about the gas perty in Italy at an hour in Germany and some of the others. The Second World War had just finished, the Carbon and Steel Treaties of the beginning of the nineteen fifties. The idea was, if we are intertwined from an economic standpoint, it is less likely that we go to work together.

00:53:17
Speaker 2: And it's mostly worked.

00:53:18
Speaker 3: And this worked, and the next thing was the Treaty of Rome, and that was the beginning of the European Union, as we know in the Masters and everything. So I just want to remind people that europe does exist. The European Union exist first and foremost not to have water in European soil, and we need to grow. Don't get me wrong. Less bureaucracy, more growth. But we should not lose the sight of what the founding fathers gave us.

00:53:45
Speaker 2: So let's talk about the perspective from the United States about Europe is lovely place to visit, but a challenging place to do business. Great place to live because much of Europe there's guaranteed healthcare, there's guaranteed paid education, paid retirement, but it makes it expensive to do business there. It's very hard to fire anybody. Is that American bias accurate or so?

00:54:19
Speaker 3: What is the criticism that is laid that at the steps of the European Union is perfectly valid? All of the things you just mentioned and more I can the least is forever long. What I'm trying to say, though, is something different. You can't expect. And this year we're celebrating two hundred and fifty this week, two hundred and fifty years of the United States of America. Europe has over three thousand years of history. Okay, so you can't expect the three thousand years of history get wiped out and everyone route they all rule in the same direction. We have come from having had war every ten years to not having had war since nineteen forty five, we have strengthened that we have culturally enormous social nets. And my concern is if the economies don't grow and we have a problem of demography in the future, we will not be able to afford those social nets. So things have to happen in Europe. I'm perfectly fine, and former President Dragy in his white paper told us what we have to do. We don't need to invent the world. We just need to un implement what it all does. Will we do it? Yes? Will it take us a long time? Absolutely yes, because it's Europe. But Europe exists for a variety of different reasons and we should never forget that.

00:55:55
Speaker 2: Really interesting, so we've talked about regions, let's talk about sectors AI in technology. Obviously a big sector manufacturing and industrial resharing is going on, infrastructure changes, financial services, energy and renewable energy, healthcare, defense, So many different areas seem to be going through massive transitions. What do you do with such a target rich environment like that? How do you decide where to focus or does the market? Do the companies reveal themselves and it becomes self evident.

00:56:37
Speaker 3: So we had and we have an accounting plan year by yeah, by sector by sector by region where we looked at the virus sectors. And while you mentioned that all of them in one go, not every sector is hot at the same time. So the focus is within all the sectors in every count and B subsector. Do we have the twenty eight subsectors? Do we have enough bankers, do we have enough resources are located? Can we do more? Should we do more? What's they if we have to prioritize, how do we prioritize those asks? And that's what we do. So there is an enormous amount of account planning, which if you do well, then the results will come.

00:57:25
Speaker 2: And you know, the drug y white paper sort of veers into government driven industrial policy. Obviously that's big in China, it was big in the United States up until about forty years ago. It seems like it's coming back. How do you think about government involvement in these private company decision making and growth?

00:57:50
Speaker 3: So Europe does have already a larger component of the economy that are state owned or partialist own companies. So from a European standpoint in itself, is not so rare to have concept like that. Concepts like that. The idea to me is more, can we have Pan European champions. We have done that in the automotive sectors. We have done that in the airline industry. We have not really done that in other sectors. So Europe has freedom of movement for people, for capital, but there is no real freedom of movement for services yet. So that's one of the things that we should try to implement and therefore facilitate the growth of European champions in the various sectors that some of them you mentioned, so that we will be able to compete better with the US on one side, or or with Asia on the other side. Europe suffers not softwares. Europe is still a little bit of a bias. And then small is good because more protects the consumer from an economic standpoint, thinking about oligopolice and everything else. I think it's a stage where right now size matters, and therefore large we should facility the creation of larger European companies pan Europeans, not country specific, but pan Europeans.

00:59:38
Speaker 2: Like air Bus. That's that's the model.

00:59:41
Speaker 3: Air Bus could be one could There are plenty of other examples in in consumer there are a few in cars, Stellantis as an example. We should do that in financial services, for instance. I think it's fundamental that Europe does have larger financial services player and so on and so forth.

01:00:06
Speaker 2: What's fascinating to me about Europe. So I appreciate what you're saying about smaller companies need to get big. In the US, where we used to enforce any trust rules but kind of stopped in the nineteen eighties, not only have these companies gotten big, but they've become mega companies that dominate their space. To be clear, that's very unlikely to happen in Europe, right. You want them large and global and competitive, but not necessarily at least if I'm going.

01:00:38
Speaker 3: By yes, that would be a step too far from a European Union fundamental way in which the Europeans look at the business. But larger companies absolutely right.

01:00:51
Speaker 2: I was curious because they seem to be very I don't want to say hostile, but very specific about regulating the facebooks and apples and Googles of the world versus smaller companies that are trying to get a toe hold in the global marketplace. All right, So before I get to my favorite question, one last question, what do you think most people in investment banking and or and or commercial or corporate banking aren't thinking about but really should be what what What's the important topic that's not getting enough focus.

01:01:32
Speaker 3: H that's a good question. I think there is a ton of focus on AI, geopolitics, inflation and other things, and I think we don't spend enough time in focusing more on the people and how we prepare the people for the future that is coming.

01:01:55
Speaker 2: So is that education, is that corporate training or everything?

01:01:59
Speaker 3: It's a little bit of everything. How do we explain to folks how we see the future? So we should do more from that point of view and prepare them for a future that is coming. But that starts with academia and how we recruit people and so on and so forth.

01:02:17
Speaker 2: So let's jump to our favorite questions we ask all our guests, starting with tell us about your early mentors who helped shape your career.

01:02:26
Speaker 3: So I had I've been lucking to I had many people looking after me over the years. I've been lucky to work to have worked for the same individual for nineteen years I joined that was his analyst, it was the associate on the desk, and nineteen years later we were to senior managing directors, but I was still working for him. But there are a couple that I think the trip that I would like to mention. One is Mattel Delfante. When I joined in London, it was the most senior Italian at the firm and is now the CEO of paste in Italy. Is as a friend as somebody has looked after me and helped me guide me. He's from Tuscany too, And then probably Mark Patricchiani, who retired in twenty twenty four and was running the markets business. And Carlos Hernandez who was running banking before me, and I still remember when he was. When I was in Hong Kong during COVID, he used to call me twice a week, religiously, every week, without booking a meeting, just call him and say, how how's everything going? All good? Tell me what's happening. So that human element was really, really, really really important for me.

01:03:39
Speaker 2: Let's talk about books. What are some of your favorites? What are you reading currently?

01:03:43
Speaker 3: So I'm reading an avid reader, so I read lots of stuff, nothing financial driven. Right now I'm reading three Italian books at the same time, which is a little bit complicated. But one book that I read that recently I like novels, I like fiction. But the one book that I read quite recently that impressed me was a book called The Wealth of Shadows Wealth, The Shadows of Wealth Sorry by Graham war and it explains in a fictionalized way, how the US during the Second World War used its economy to cripple the German economy and you have individuals like Cairnes play to this, and how ultimately this became bread on woods and the role of how the dollar overtook the pound and so on, and so that was fascinating. And I read another book called a Girl called run A Sampson that it's about the Revolutionary War here in the United States and a woman that it's a real history a woman that for.

01:05:01
Speaker 2: In the in the.

01:05:03
Speaker 3: Continent I think you called Continental Army and the Washington dressed as a boy. Oh really, yeah, those are two. But I also use a lot audible So audiobooks have been literally my my saving grace because I can listen to them while I'm traveling on planes, so I don't need to carry the books, the physical books with me. It's been has been I'm a heavy user of Audible.

01:05:31
Speaker 2: Besides Audible, what else are you streaming? What are you either watching or listening to and.

01:05:37
Speaker 3: Watching apart from your program? Obviously, my wife and I love The Outlander on Netflix, which is just stream the last season or start I think it will starts here in the US and then drops of God About Wine. It's a fan fascinating in series. And a few others.

01:06:02
Speaker 2: Huh, really interesting. We watched off Lander until the previous season kind of like all right, we're good right here when they were stuck in the United States, But it was really fascinating show. Final two questions what sort of advice would you give to a recent college graduate interest in a career in either corporate, commercial or investment banking.

01:06:28
Speaker 3: It's not as printed Samarathon, So take your time, understand the environment in which you operate. Try to focus on the biggest important things. Don't be to focus on just on the product, but understand the environment in which you operate. Remember, it's a people business, both internally and externally, so make sure that you invest in creating human relationships.

01:06:53
Speaker 2: And our final question, what do you know about the world of investing? Investment banking today might have been useful back in nineteen ninety nine when you were first getting started.

01:07:05
Speaker 3: It's a marathon, it's not a sprint. So never never take things for granted the end above all, don't make personal sacrifices that too that you're gonna later. At times, I've been not as present as I would have likeded with my family.

01:07:28
Speaker 2: Interesting enough, Felipo, thank you so much for being so generous with your time. We have been speaking with Filipo Gory. He is co head of Global Banking at JP Morgan. If you enjoy this conversation, well check out any of the six hundred and fifty we've done over the past twelve years. You can find those at iTunes, Spotify, Bloomberg, Apple Podcasts, YouTube, or wherever you get your favorite podcast. I would be remiss fund and thank the Crack team that helped us put these conversations together each week. Alexis Noriega is my video producer. Sean Russo is my researcher. Hannah Luke is my podcast producer. I'm Barry Ridholtz. You've been listening to Masters of Business on Bloomberg Radio.