In the late 1990s, Bill Contente and Elizabeth Myers sat a couple of cubicles from each other in the Manhattan offices of J.P. Morgan & Co., where last summer they were named co-heads of equity capital markets for the Americas. The investment bank wasnt the biggest ECM player in those days, but for the two friends that spelled opportunity. Both stayed with J.P. Morgan, which was scraping together market share. Myers, 40, whod taken a break to get an MBA from Harvard University, worked as an analyst and then an associate at the firm, eventually settling into finance. There were some sectors that people perceived as hot, the Detroit native says, and finance wasnt one of them. By her mid-30s, Myers led the financial institutions team.
After graduating from Yale University with an economics degree in 1991, Contente joined J.P. Morgan and hit the road, working on M&A deals and IPOs in Latin America and Europe as well as on the West Coast. He spent some time in New York in the late 90s before moving back permanently in 2000, the year his firm became JPMorgan Chase & Co.
Under CEO Jamie Dimon, JPMorgan used the financial crisis to grow from an also-ran to a dominant force in equity capital markets. In 2008, Contente was busy with Visas $19.65 billion offering, the largest IPO at that time, when capital markets began to unravel. We priced it two days after JPMorgan acquired Bear Stearns, he says of the Visa offering, which was still a roaring success. In November 2008 a deal coordinated by JPMorgan for Wells Fargo & Co. was increased to $12.6 billion, making it the richest non-IPO offering in U.S. history. That came during the biggest two-day drop in U.S. equity markets since 1987. Late-inning home runs like those helped JPMorgan reach No. 2 in global equity and equity-linked issuances for 2008, with $59.5 billion in deal value, according to Dealogic.
The crisis devastated IPOs, plunging U.S. value to $17 billion in 2009 from $60 billion two years earlier. But the ECM team at JPMorgan pulled through, as Myerss out-of-fashion financial sector returned to the limelight, pushing the bank to the top of the equity league tables for the year with $94.4 billion worth of global equity deals, compared with $76.5 billion for second-place Goldman Sachs Group.
JPMorgan has handled 35 bank recapitalization offerings, becoming a specialist in Troubled Asset Relief Program repayments, of which it has done 13. Perhaps the highest-profile TARP recipient was General Motors Co. Contente, 41, was among those on the scene in November 2010 as last-minute adjustments raised the share price and float of the automakers $23.14 billion IPO. My dad was one of the pensioners I worked on behalf of, notes the New Jerseyraised banker, whose father built cars for GM. Daniel Ammann, GMs CFO, says of Contente, Hes a very level-headed, unflappable and straightforward guy.
Since JPMorgan dropped to third place in the equity issuance rankings last year, Contente and Myers have had to duke it out with frontrunners Goldman and Morgan Stanley in an increasingly competitive sector. Although dozens of banks have TARP repayments pending, most are small: Whats next are large-cap government monetizations, Myers explains. JPMorgan is reportedly among the banks working on issues for American International Group and Ally Financial.
Energy and commodities should be another growth area, along with emerging markets Chinese companies tapping the U.S., for example. Tech deals will dominate the China pipeline, and were working on numerous transactions, Myers says.
Financial institutions will also turn a corner as the economy rebounds, while rising interest rates could spark a surge in convertible shares, which Myers and Contentes 65-member group handles too. And look for a brace of IPOs reminiscent of the tech boom, involving consumer-oriented, Internet-based companies with sexy names like Facebook and Skype. Such issues could be among the largest ever, a prospect that appeals to Myers and Contente. One of our hallmarks has been moving through traditional barriers, Myers says. We never think of history as defining whats possible.