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On a chilly afternoon in February 2005, Stephen Murray entered the Park Avenue headquarters of JPMorgan Chase & Co. and rode the elevator that would take him to the 48th floor and the office of the bank’s then president, Jamie Dimon. The famously candid Dimon had joined the bank the previous summer, after the institution he ran, Bank One Corp., merged with JPMorgan, and Murray, head of buyout and growth equity investments at J.P. Morgan Partners, the bank’s private equity group, wanted to get his new boss’s take on business.

For months, Murray, Dimon, JPMorgan CIO Ina Drew, the firm’s famous deal maker James (Jimmy) Lee Jr. and J.P. Morgan Partners’ longtime CEO, Jeffrey Walker, had been hammering out the details of a deal that would spin out the private equity group after more than two decades within the walls of the bank and its predecessor firms. Murray, then 42, was getting the chance to become a partner in the new enterprise.

It was the opportunity of a lifetime, but Murray, who had struck deals with CEOs twice his age when he was in his 20s, had some concerns. He worried about the surging leveraged-buyout market, which he felt was being fueled by low interest rates and easy access to credit. Although few others in the business appeared to give a second thought to the then-record $300 billion worth of buyout transactions that had taken place in 2004 or to the growing size of private equity funds that were being raised as investors rushed to get a piece of what seemed to be easy profits, Murray saw the numbers as alarming.

A fast-talking workaholic who spurns the spotlight as often as his rivals seek it out, Murray had spent the previous year evangelizing to his staff and other investors that private equity’s future would soon lie in operational turnarounds — generating profits from revamped companies — rather than financial wizardry. It was an approach JPMorgan’s group had long followed, but Murray felt he was missing critical expertise at the top to add to the tight-knit group of deal makers on whom he relied. Murray planned to hire hands-on operators — ideally former CEOs — as full partners in the firm. The executives would be paired with a financial partner to help identify investments and turn around businesses in what he confidently believed would be a brave new world, even as competitors were going in the opposite direction.