Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Joining us now Daniel Pinzack, JP Morganschase President, Daniel, it's
Speaker 2: got to say you, sir.
Speaker 1: Thank you for inviting me. It's great. Do you hear?
Speaker 2: Do you feel happy? Do you feel lighter now? You
Speaker 2: know you're stepping down and retiring.
Speaker 1: I do a bit. I've been in the company for
Speaker 1: more than four years. I add my contribution to the
Speaker 1: success of the company. The company is in an amazing
Speaker 1: place at the moment. It is the right time to
Speaker 1: embrace an next generation, to work with Jamie and prepare
Speaker 1: the company for the future and his succession. So I
Speaker 1: feel good about the opportunities company gave me my contribution.
Speaker 1: I'm looking forward to a very violence life going forward.
Speaker 3: You are living the life that we all aspired to.
Speaker 3: Why now and what do you expect the next twelve
Speaker 3: to eighteen months.
Speaker 1: To look like? So it's very simple in the next
Speaker 1: This has been planned for a long period of time,
Speaker 1: and now is the time for me to try decision
Speaker 1: in a very, very smooth way. This transition will go
Speaker 1: over a couple of years. I will my job will
Speaker 1: be to help the management team to continue advising Jamie
Speaker 1: and the bard In issues that there is strategic and
Speaker 1: important for JP Morgan and for the future of the company.
Speaker 1: So it is a right time. It is the right
Speaker 1: group that I helped Jamie to build up to. So
Speaker 1: I think that I feel good about where the company
Speaker 1: is and where I am Now.
Speaker 3: You've finish JP Morgan and it's affiliate banks for four
Speaker 3: decades a long time. You've been to a lot of devices.
Speaker 3: You've seen a lot of different cycles of enthusiasm. How
Speaker 3: enthusiastic is the optimism around the dealmaking and some of
Speaker 3: the mergers and acquisitions that could come down the pike.
Speaker 1: I think that is quite anhusiastic. It was twenty four
Speaker 1: was a very good year too, so you think about them.
Speaker 1: An AIL historical average of volumes around four trillion a
Speaker 1: year in twenty three, it was around three point two
Speaker 1: last year three five. We think that this year could
Speaker 1: get to around four trillion, which is historical average. And
Speaker 1: most important, we hope that the timing PARTICU in the
Speaker 1: US to approve transaction is not as long. It's moved
Speaker 1: from twelve six months in the bus to running teen months.
Speaker 1: Hopefully we go back. It's not just to announce new
Speaker 1: yeers also to close new There is an environment is
Speaker 1: said for that. Let's talk about the environment.
Speaker 2: Is it just a regulatory shift that we need or
Speaker 2: do you find that four percent five percent interest rates
Speaker 2: of how people back as well?
Speaker 1: I think that if you think about the US economy
Speaker 1: has grown very well in twenty four over three percent,
Speaker 1: is likely to grow over two percent this year, So
Speaker 1: the environment is good. I think that even that is
Speaker 1: an economy that you don't see and balances that tell
Speaker 1: you that is an economy that is about to go
Speaker 1: into recession. This cycle could continue for a period of time.
Speaker 1: There is plenty of monetization that needs to be done
Speaker 1: in the sponsor space. There is essentially the evaluations in
Speaker 1: the US that are much higher than any other places
Speaker 1: is also incentivizing merging into US companies. So I think
Speaker 1: that it would be a good environment.
Speaker 2: Which way to one bank yesterday who suggested that maybe
Speaker 2: these US companies could go on a bit of a
Speaker 2: shopping spring in places like Europe where valuations were depressed.
Speaker 2: You engaged in any active conversations right now in companies
Speaker 2: looking to do those kind of things.
Speaker 1: So we are always engaged with clients all over the world,
Speaker 1: and there is a lot of optimission everywhere about what
Speaker 1: the US could do. So therefore, yes, there is dialogue.
Speaker 3: Everywhere, so everyone sounds very optimistic. And then you go
Speaker 3: to some of these for as in the evening and
Speaker 3: people say there's a lot of enthusiasm, what actually will
Speaker 3: get done, we're less clear on, just simply because there
Speaker 3: is that question mark to John's point about benchmark rates,
Speaker 3: about the fact that the economy isn't slowing down so much,
Speaker 3: so why would they go any lower? And what happens
Speaker 3: if they go higher?
Speaker 1: Still? Because of that and deficit, I tell you how
Speaker 1: I think about it. When you think about the US economy,
Speaker 1: isn't a good place here, not a balance is. Consumer
Speaker 1: is in a good place, the corporate sector is in
Speaker 1: a good place. Inflation hasn't yet got to the levels
Speaker 1: that it should be, and the deficit is high. And
Speaker 1: then you have policies coming from immigration, policies, started physical
Speaker 1: the policies and others. So at the end, this government
Speaker 1: is about growth. So therefore I hope they will balance
Speaker 1: the implementation of those policies in a way that it
Speaker 1: doesn't either overhit the economy or trigger a recessions so
Speaker 1: I think that the hope is because of that, because
Speaker 1: the economy is in a good place, and certain things
Speaker 1: like rational revelation, I don't like to talk about the revelation.
Speaker 1: Rational revelation in our sector, in any other sector could
Speaker 1: be good for growth, but if things go too far,
Speaker 1: then the fact will have may have to hydrate and
Speaker 1: deal with inflation. Hopefully it doesn't happen.
Speaker 3: I guess what I'm getting at. Some people are asking
Speaker 3: what potentially to rail this optimism? Is there anything that
Speaker 3: you could see derailing this optimism this year at a
Speaker 3: time when people are basically counting on this sort of
Speaker 3: rational regulation or some of the other growth measures.
Speaker 1: It's an extent, is what I said. Like inflation could
Speaker 1: be that economy goes a bit too fast and doesn't
Speaker 1: allow inflation to come down. That geopolitical space is still
Speaker 1: in a challenging place, though there is some signs of
Speaker 1: potential improvement there. And at the end, is like any
Speaker 1: other policy, you can do the right amount, you can
Speaker 1: do too much, too little. Hopefully the right amount, the
Speaker 1: right amount is done in a way that doesn't really
Speaker 1: derail An economy that is not ready for a recession
Speaker 1: is an economy that is ready to continue to go
Speaker 1: at a decent pace.
Speaker 2: Daniel, A lot's changed in your banking career, tremendous amount,
Speaker 2: and now a bunch of alternative asset managers are looking
Speaker 2: for the activity that traditionally was on a bank balance sheet.
Speaker 1: Can you walk us through as.
Speaker 2: You depart, how different banking might look in the years
Speaker 2: ahead compared to when you first started.
Speaker 1: Well, it's very different. I think that is in a
Speaker 1: better place, with more scale, better quality of service, is
Speaker 1: a very quality of products, and a safer industry that
Speaker 1: probably has ever been. I think that if you are
Speaker 1: referring to private credit, I think that banks we've been
Speaker 1: lending for two hundred years and private credit is no
Speaker 1: more than a normal loan. So I think that we
Speaker 1: feel very good and where we are in order to
Speaker 1: compete in that space. And at the end, so what
Speaker 1: is how we're rejected to be able to provide the
Speaker 1: best possible service to a client? So, therefore, what is
Speaker 1: it is in a certain transaction, you will be able
Speaker 1: to offer a syndicative facility or you will be to
Speaker 1: offer that a lending facility. Both markets will tend to
Speaker 1: converge some way or the other, and we are in
Speaker 1: an amazing position to compete because we do have relationship
Speaker 1: with all those clients and we offer them not just
Speaker 1: the loan, We offer them a bunch of activities.
Speaker 2: We saw a relationship developed between Mark Row and Apollo
Speaker 2: and Jane Fraser's City announced the end of last year.
Speaker 2: Are you exploring similar partnerships.
Speaker 1: We have plenty of partnerships, several where we have go
Speaker 1: landing facilities with rather as the managers, and that they
Speaker 1: want to participate in the origination. The issue for all
Speaker 1: these funds at the moment is that they are getting
Speaker 1: a huge amount of influence and they may not be
Speaker 1: enough accests to deploy. So therefore, to have a partnership
Speaker 1: with someone like us, a city or any other to
Speaker 1: be able to participate in the origination of these banks
Speaker 1: is a good thing. We are doing the same, not
Speaker 1: just with one, with as many as we can.
Speaker 3: That kind of dynamic gets people worried. Not to be
Speaker 3: negative Nelly here, but you know.
Speaker 1: Going to worries going forward.
Speaker 4: I realized, Okay, I realized that I'm sounding pretty negative,
Speaker 4: but I'm wondering, given how much the flows have come
Speaker 4: in to the private credit sphere and how they've been
Speaker 4: searching for ways to be deployed.
Speaker 3: Is there anything that makes you nervous within this ecosystem
Speaker 3: that's grown up very.
Speaker 1: Quickly at the moment Now, I think that when you
Speaker 1: look at these funds, they don't have too much leverage.
Speaker 1: Their leverage one one and have times. So from that
Speaker 1: point of view, particularly in the more in the bigger
Speaker 1: space bigger loans, not so much. The only thing that
Speaker 1: made me post and think about it is there it's
Speaker 1: a lot of direct lending going into small business. There
Speaker 1: is a lot of lending going into the smaller side
Speaker 1: of middle markets. And this industry in the current form
Speaker 1: hasn't been tested through a down turn cycle because when
Speaker 1: COVID happen, it was al subsidized by the by the
Speaker 1: different governments. So how these fans are going to behave
Speaker 1: in a downturn with small business is something that you
Speaker 1: want to be concerned about. It you want to keep
Speaker 1: an eye on. But I don't think that there is
Speaker 1: a systemic reissue in this space in the short term.
Speaker 1: The components are not there for that to happen.
Speaker 2: Daniel find a question, how's the golf game?
Speaker 1: It's okay, It's been the terror rage what's awfully what's
Speaker 1: the handicap? Now he has gone from five to eight.
Speaker 1: Hopefully I go back and do it now.
Speaker 2: You appreciate your time, sir, Congratulations on a fantastic career,
Speaker 2: Thank you, thank you, and looking for the come in
Speaker 2: the next twelve months with.
Speaker 1: Each say absolutely thank you.
Speaker 2: Sir. Daniel Pins are there? The President of JP Morgan Shacks.