CHAOS_KENRO.ai 1 21/02/12 18:04

Trust and Confi dence

An Interview with James B. Lee Jr., Vice Chairman, JPMorgan Chase & Co.

EDITORS’ NOTE In 1975, Jimmy Well, you are talking to one of the Do you feel that entrepreneurship and Lee joined Chemical Bank and most incurable, patriotic optimists out innovation are being lost in the U.S.? worked in a variety of spe- there. Yes, I think we have probably No, I don’t agree with that. I spend cialty lending businesses until lost a little of our mojo, but we will a lot of time in Silicon Valley and the num- 1980, when he founded and get it back. ber of smart young people there who are ran Chemical’s merchant bank in We have gone through much launching their careers is just staggering. And Australia. He returned to the U.S. worse before as a nation and we will they are funded by real companies this time in 1982 and started the bank’s syn- get through this. The American way around. dicated loan group, which consti- is very rehabilitative; just look at our Twelve years ago, I was fortunate tuted the origins of the investment bankruptcy code. Every American enough to lead the team when we acquired banking business at Chemical loves the Comeback Kid. Hambrecht & Quist. That deal did four things and later Chase Manhattan Bank. The American people are not for us that I felt were important at the time: James B. Lee Jr., C Lee ran the investment bank un- happy. They know what the problems fi rst, it created our fi rst technology practice; til the merger with J.P. Morgan & are and they want them fi xed. We are second, it enhanced our healthcare practice M Co. in 2001. Following Chemical’s merger with a resourceful people, so I am confi dent we will with a biotech emphasis; third, it launched

Y Manufacturers Hanover in 1991, Lee founded come back. our first public equity business, which was the bank’s high yield business, which was the The lines in the U.S. at immigration are the last piece to the one-stop-shop puzzle; CM company’s fi rst public securities business, there- a mile long. The applicant lists at all the great lastly, it gave us a beachhead in California, MY fore competing directly with Wall which you could see was going to

CY Street for the first time since Glass- be a springboard of American en- Steagall was enacted. At the same trepreneurship. Although H&Q was CMY time, he built the bank’s coverage of small, it was a game changer for

K private equity firms and its mergers us. Some of the people leading our and acquisitions business. Later, practices today came from H&Q. he led the acquisition of Hambrecht Our Healthcare Conference is still & Quist (H&Q), which was the bank’s the mother of all of the big equity fi rst public equity business. Along the There is more deal conferences. way, he recruited several talented ex- But as important as that acqui- ecutives to help lead this effort, many sition was for us back then, this time of whom are still with the company in fl ow than last year and around, the Valley is different. There positions of leadership. This integrated are very large private companies approach to loans, bonds, equity, and we expect it to pick up that have yet to go public, which are M&A created “one-stop shopping”, run by seasoned executives with se- which pioneered today’s industry rious big cap company experience. standard for investment banking. He even more later Not only is the innovation there that received a B.A. from Williams College we have come to expect from the in 1975, where he double majored in Valley, but you also have an overlay Economics and Art History. in the year. of real deal leadership – blue chip in some cases. So I’m bullish on in- COMPANY BRIEF JPMorgan Chase novation, where it’s going, and how & Co. (www.jpmorganchase.com) much capital is financing it. But I is a leading global fi nancial services am even more bullish on the stay- fi rm with assets of $2.3 trillion and ing power of the winners. Some operations in more than 60 coun- will become Dow Jones companies tries. The fi rm is a leader in invest- in my view. If you have lost faith ment banking, financial services in American business – just go to for consumers and small business, commercial colleges and universities are packed with kids Silicon Valley. banking, fi nancial transaction processing, asset from around the world. Silicon Valley contin- Where is the U.S. today in terms of deal management, and private equity. ues to produce ideas that are changing the way fl ow? the world lives, not unlike the automobile, tele- There is more deal flow than last year How concerned are you that the U.S. is los- phone, and light bulb did. It’s hard to be pes- and we expect it to pick up even more later in www.montegrappa.com ing its competitive edge and is today’s dia- simistic about all this. The world still believes in the year. The activity is still low by historical logue addressing the key issues needed to us. We need to believe in us and I am confi dent standards, but it’s higher than it was a year remain competitive? that will happen. ago. VOLUME 35, NUMBER 2 POSTED WITH PERMISSION. COPYRIGHT © 2012 LEADERS MAGAZINE, INC. LEADERS 55

Untitled-3 2 2/21/2012 3:15:44 PM There are many elements that go into winning the biggest deals. You need a great brand, a great team, deep levels of competency, killer preparation, and client trust – all fi ve.

The drought can be pretty long and pun- Every move we make is made with the client’s within 10 years; an initiative led by my fabulous dits will say it’s gone and it will never come best interest in mind and they need to know that. partner Frank Bisignano. We have also reached back. Markets have a way of blindly believing Because we live everyday on Wall Street, out to our corporate clients to join that mission, tomorrow will be like yesterday, but we all we know the differences among these fi rms are so there are now 30 companies involved. know that is not always right. At some point the actually quite large – the people, culture, and Last year, JPMorgan Chase hired 3,000 vet- dam will burst because there is just too much sizes among the fi rms are different, as are best erans and the entire group of companies hired water. practices. But to many CEOs, the actual differ- 6,000. We give people who have served our You have a reputation for winning a lot ences are perceived to be much smaller. country a job. They are all trained leaders so it’s of the biggest deals on the biggest stages, It’s what I call the “on-any-given-Sunday” good for us and good for our customers. even when there are a lot of smart people effect – i.e. on any given Sunday, any team can Philanthropy and giving back is a win- going after these deals with good brands be- beat any other team. The CEOs fi rst look to win. JPMorgan Chase donated $275 million to hind them. What is your secret? brand, team, competency, and preparation. But nonprofi t organizations last year. We provided There are many elements that go into win- to win the big ones you have to gain the CEO’s credit and raised capital of $1.5 trillion for our ning the biggest deals. You need a great trust and confi dence, and CEOs can be very clients. We increased our small business by 52 brand, a great team, deep levels of competency, skeptical of Wall Street today. percent last year and hired more than 17,000 killer preparation, and client trust – all fi ve. So the ultimate key to winning is building people during last year’s diffi cult job market. The foundation of our company’s success that trust. My team and I work really hard on When clients are looking to build a rela- has to be solid collaboration across the busi- that. tionship where the outcome is these big deals, nesses. Our brand is resonating bet- it’s about a lot more than just banking ter than ever under Jamie’s (James the major clients. It all starts at the Dimon, Chairman and CEO) leader- top. Jamie sends a message of authen- ship in corporate boardrooms. On the ticity that breaks down a lot of the very biggest deals, Jamie and I often clichés and Wall Street stuff. You just team up. Jes Staley, the CEO of our need a team that lives and breathes it. Investment Bank, and I are always Would you talk about your en- partnering on one idea or another. gagement in education and how And I often work with Mary Erdoes, But to win the big ones that has evolved? the CEO of Asset Management, to My dad passed away when I was help clients in her world. 12 and I went through a few tough In terms of the team, we have you have to gain the CEO’s years. So I promised myself that when some spectacular people I have the I got older and could control my own privilege of working with. For ex- trust and confi dence, and destiny, I would look after kids. ample, folks like Liz Myers, who When Nicky Forstmann died, runs equity and worked with me on I wanted to think of a way to help AIG, or Andy O’Brien and Jim Casey, CEOs can be very skeptical inner-city kids in his honor. So I put a who run our debt businesses. We scholarship in place. Every year in the have outstanding industry bankers Catholic school system in the city, a like Eric Stein, Jennifer Nason, Larry of Wall Street today. committee chooses a boy and a girl to Alletto, John Simmons, and Fernando receive the Nicky Forstmann/Jimmy Rivas and some terrifi c up-and-com- Lee scholarship. The recipients have ers like Noah Wintroub, Goksu Yolac, to excel in grades, athletics, and lead- and Michael Millman. I spend a lot of ership. My wife and I did the same time with Anwar Zakkour and Chris thing at our daughters’ school. Ventresca on our M&A team. These For about 15 years I have been on are all bankers with years of experi- the board of the New York Police and ence, who are deeply competent in Firefi ghter Fund, which helps out widows their fi elds. How critical is being a good corpo- and kids who have lost a parent. I recently joined the But competency without rigorous prepara- rate citizen and how has that affected your board of the mentoring organization Big Brothers Big tion, analysis, and attention to detail will not views on philanthropic work? Sisters. I am also a very passionate alum of my col- win the big deal. There is no such thing as be- I was fortunate to be the Chairman of the lege, Williams, which will always occupy an impor- ing over-prepared because the really big deals committee that Jamie set up four years ago to tant part of my giving; it got me on my way. are the most competitive in the world. study our initiatives with the military and vet- My philanthropy is focused on children But of the fi ve points, the most important erans. One of the most exciting outcomes of and giving them a better shot at the American by far is earning the CEO’s trust and confi dence. our work is the mission to hire 100,000 veterans dream, which I still believe in.• 56 LEADERS POSTED WITH PERMISSION. COPYRIGHT © 2012 LEADERS MAGAZINE, INC. VOLUME 35, NUMBER 2