Tag Archive for: JP Morgan

J. P. Morgan Private Bank Loses Another Team; Morgan Stanley Grabs $3B Group In Salt Lake City

Another week, another headline associated with a departure from J. P. Morgan Private Bank. David Frame, CEO of J. P. Morgan’s Private Bank, is having a really, really tough year.

The latest team to tell JPM to kick rocks hails from Salt Lake City, Utah. That effectively closes the loop on Private Bank departures across the country for JPM. Other departures have been announced in LA, Miami, Dallas, Atlanta, NYC – and stay tuned for the next three to four that aren’t far behind. You can bet your ass that David Frame and his management minions are having as many meetings as they can stand to figure out how to stop the bleeding.

The details of the Salt Lake City team that migrated to Morgan Stanley are as follows: Brian Swenson, Eric Smith, and Jesse Bohannon including staffers Melissa Sende and Charlotte Painter. They walked out with $3 billion in client assets, and have joined Morgan Stanley’s PWM division after their 90-day garden leave.

Over the past six months, if you are scoring at home, JPM is closing in on losing nearly $50B in client assets from the Private Bank. Again, executive leadership is in serious trouble. You can’t hemorrhage talent the way that’s been happening there without some level of accountability. Keep your eye on that dynamic as well.**a side note – we are chasing down the kind of deal Morgan Stanley is offering private bankers. We know what UBS is doing, but as of this print, Morgan Stanley is still offering private banking recruiting deals based on W-2 revenue. If that changes, you’ll be the first to know.

Whose Next? As Private Banking Recruiting Ramps Up Which Wirehouse Is Set To Benefit Next

The ranks of ‘private bankers’ at global investment banks like JP Morgan and Goldman Sachs have become some of the most sought after recruits in 2020. Their relative books of business have been dubbed more portable than previously believed and the market is beginning to reflect it.

We’ve previously discussed that UBS has been committed to and benefiting from recruiting ‘non-traditional’ teams in the past year, but we wonder, who’s next? What firm might be the next to jump into the fray and begin valuing these groups based on their stated revenue as opposed to their W2 personal income?

As of this post, we aren’t sure who it might be, but we think it makes sense for both Wells Fargo and Merrill Lynch (ML has dipped their toe into the private banking waters a bit already). Wells Fargo’s inclusion is obvious – they need the good press, momentum, and to replace the advisors that have walked away from the firm over the past two years.

And Merrill Lynch – it’s well documented that every headline associated with a team leaving BofA/ML isn’t a small fish. Big teams have been leaving ML for years. Adding outsized assets and revenue by way of private banking teams would serve the firm well.

No matter who it is, they aren’t getting anywhere until they begin to adjust their recruiting deals away from W2 income. Someone is going to catch up to UBS – let’s see who gets there first.


Rumored JP Morgan Securities Protocol Exit Could Damage Practice Valuations, Complicate Transitions

In a move that may not surprise anyone (given the continuing consolidation of advisors inside the JP Morgan ecosystem), we are hearing that JP Morgan Securities is about to bow out of the broker protocol.

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Moderna Valuation a Concern for JP Morgan

Moderna (MRNA) has surged over 300% since the start of the year. Analysts at JP Morgan, concerned about the company’s valuation, have downgraded the stock to neutral.

Other industry experts agree. Mani Faroohar, a top analyst at SVB Leerink, outlined a scenario this week where Moderna may drop to as little as $19 a share by the end of the year. He called their current valuation of $32 billion “unappealing” when evaluating risk versus reward.

The main area of concern is whether or not the smaller Moderna can compete against pharma giants like AstraZeneca and Pfizer. Despite receiving $483 million in Covid-19 funding from the federal government, Moderna president Dr. Stephen Hoge refuses to discuss pricing.

“We will not sell it at cost,” Hoge stated at a hearing before the House energy committee this week. He may not have a choice. The NIH is claiming intellectual property rights due the government’s investment into the vaccine’s development. They want it at or below cost.

Moderna has never successfully brought an approved product to the market. Their vaccine is considered one of the frontrunners in the race due to positive clinical trials, but there’s still a long road ahead. Maneuvering for profit may not be the best approach right now.

Kolanovic: Market not Properly Pricing Covid-19 Surge or 2020 Election

In other news, Marko Kolanovic, JP Morgan’s global head of macro quantitative and derivatives research, has released a report on pricing anomalies during the Covid-19 surge. It attempts to explain why value stocks are vastly underbought while growth stocks continue to thrive.

“Investors are worried about the surge in Covid-19 infections,” Kolanovic stated. “The possible election of former VP Joe Biden also raises concerns about long-term value investments.”

The study shows that buyers are opting for growth stocks while the market is still in an uptrend. Meanwhile, Aroon and momentum indicators are driving traders away from value positions. It’s possible that the trend may reverse after the election, depending on results.

Pfizer Signs $1.5 Million Vaccine Deal with Pentagon

The US Department of Health and Human Services announced a $1.95 billion deal to buy 100 million doses of a Covid-19 vaccine being developed by Pfizer and their German-based partner BioNTech. The deal is dependent on the completion of successful clinical trials and FDA approval.

BioNTech announced a share sale on Tuesday to raise cash so that Pfizer can become a shareholder in their company. Their current market cap is $21 billion.

JP Morgan, along with Bank of America, and Berenberg, is organizing the deal.

In January of this year, Albert Bourla, CEO of Pfizer Inc, was a fireside chat speaker at JP Morgan’s Healthcare Conference in San Francisco. At the time, he claimed that his company was “underappreciated” and touted their recent and upcoming successes.

Stephane Bancel, CEO of Moderna, was not on the speakers’ list for the conference. Vaccine development wasn’t on the agenda. US consumer drug pricing was a hot topic.

AstraZeneca, formerly considered a frontrunner in the vaccine race, released data on their clinical trials this week. Analyst Ronny Gal from Bernstein said it “failed to impress.” Peter Wellford at Jefferies claimed the share price move was “overdone.”

It looks like a two-horse race. JP Morgan appears to be betting on Pfizer.