From a tearful mailbag:
Jamie Dimon is FIRING JPM's small prime brokerage clients and administrative clients, saying, "You're just not big enough for us, we only want to handle accounts of 1 billion and up, too bad, you have a month to move your accounts." This dictate comes directly from Dan Tennant (hatchet man for Jamie) of the old Bear (Oh please Mr. Dimon, sir I will do anything, let me keep my job) signed off on by Jamie Dimon's office. Asked for a letter of the firing, "Not happening" was the answer.So if you are an RIA running 2-4 hundred million--positive performance, didn't tank in 08, hire smart people, minorities (all), do everything right--you go from a legit prime broker and administrator, which gives your investors comfort, to a bucket shop and some fat guy in a black suit, sitting on the beach holding an umbrella, in the Cook Islands. 200 firms fired. JPM reverse spin.
Where is Einhorn when you need him, if he could take down Lehman - maybe he can help with JPM?
Posted by american bandersnatch , May 12, 2009 9:04AM
Quit your whining. Why should Achilles devote the resources of his market leading firm to subsidize your too small fund?
Posted by guest , May 12, 2009 9:08AM
"minorities (all)"
nice touch.
Posted by guest , May 12, 2009 9:12AM
I'm on the case!
-Einhorn
Posted by guest , May 12, 2009 9:19AM
there's no crying in baseball!
Posted by guest , May 12, 2009 9:22AM
He only deals in Dimon and pearls.
Posted by guest , May 12, 2009 9:22AM
so what. is this guy trying to tell jamie dimon how to run his business? when you're CEO you can take all the shitty accounts back.
Posted by guest , May 12, 2009 9:27AM
6 = Jamie Dimon
Posted by guest , May 12, 2009 9:29AM
@5
pearl necklaces you mean
Posted by guest , May 12, 2009 9:40AM
So JPMorgan should be put out of business because they won't prime broker your little money management business? Really? Do you kill people who turn you down for dates and burn down restaurants that don't give you reservations?
Posted by guest , May 12, 2009 9:41AM
@9- i think the tag says it all.
Posted by guest , May 12, 2009 9:47AM
@9 =
back office suck-up
Posted by PatrickBateman , May 12, 2009 9:48AM
This isn't really all that ground shaking. Virtually any prime broker that's still in business will be itching to handle any new accounts. Granted, those 200 accounts are pissed...
Posted by guest , May 12, 2009 9:59AM
patrickbateman@12- but the jilted woman doesn't want the fat guy in a black suit!
Posted by guest , May 12, 2009 9:59AM
why fire the small accounts? Isn't the point of those to find out the shitty salespeople & get the graduates educated?
Posted by guest , May 12, 2009 10:08AM
@11 the original tags did not include the woman scorned one, so don't be such a cunt because everyone doesn't pore over every post with a neurotic obsession like you do.
Posted by guest , May 12, 2009 10:14AM
Everyone knows the smaller accounts need the most hand holding (ie time, energy and resources._ And the fails to deliever are most likely occuring with those accounts as well.
Posted by guest , May 12, 2009 10:22AM
Wait, prime brokerage is still a business in 09?
What next, news on Cap Intro?
Posted by guest , May 12, 2009 10:24AM
JPM only has (had) 200 clients under 1B? No way.
But, as a warning shot to anyone who likes to split up their Bro 3 or 4 ways, well okay, point taken, either it's 80% JPM or hit the road...
Posted by guest , May 12, 2009 10:27AM
This is not news. Its not like you need to close down now that you don't meet the JPM standard. You simply move somewhere down the PB food chain, which is proably where you should have been all along.
Posted by guest , May 12, 2009 10:30AM
@15- chill out on the roids, jamie
Posted by guest , May 12, 2009 10:31AM
@19 here here
Posted by guest , May 12, 2009 10:36AM
@19- it's news that this guy--and 200 of his friends-- are getting their panties in a bunch over the jilt.
Posted by PaulAllen , May 12, 2009 10:36AM
When do we become such a bunch of panzy, populists..?? If that's the way JP Morgan wants to run its business, so be it. So much "entitlement" sentiment these days.
Posted by guest , May 12, 2009 10:37AM
the appeal for Einhorn to come to their rescue is priceless.
Posted by guest , May 12, 2009 10:52AM
Not sure how accurate this is. As of this morning, I know of two exceptions to this anecdote already...
Posted by guest , May 12, 2009 10:54AM
22 19 here.. Now I see. I first read fast and though DB wrote it.
Posted by guest , May 12, 2009 11:05AM
@ 14, 16, 18
Remember, this is just prime brokerage, not the whole company. I'm sure S&T desks will still work with smaller, layoff type accounts.
Posted by guest , May 12, 2009 11:12AM
@17 is a tool, PB is alive and well. What do you think all of these funds are going it alone?Your ignorance is laughable. Not only is it alive, its prob one of the only safe revenue generating businesses that are left.
Fill it up with regular chief
Posted by guest , May 12, 2009 11:19AM
if JPM closed my account I'd sue the pants off of them in Delaware court
Yep, you guessed it:
The Guy From Delaware
Posted by guest , May 12, 2009 11:22AM
28 Is PB really business as usual? I though that changes in securities lending (a profitable part of that business) have altered the landscape big time. Your thoughts?
Posted by guest , May 12, 2009 11:26AM
@30, not at all. There have been no changes in sec lending besides the retarded short sell ban that put a crimp in the biz at the end of last year. Its business as usual. Hedgies are looking to minimize counterparty risk so they will only do biz with certain counterparts. MS andd GS have downsized their PB's, other that that everyone else is still involved in the game.
Posted by guest , May 12, 2009 11:32AM
CIBC needs a PB unit.
Posted by guest , May 12, 2009 11:38AM
@15
@11 here. now that your shrill nonsequitor about the tags is out of the way, get back to whatever useless task the burden of your presence is supposed to solve, or you'll be scanning the job listings with "neurotic obsession".
Posted by guest , May 12, 2009 1:01PM
The only issue with this is big funds start small. With the exception of a handful of big launches in recent years (ala Eton Park et al.), most funds start well under 1bln. JPM doesn't want the biz/loyalty of the next generation of successful long/short managers? As Einhorn is mentioned in the article, didn't he start with just peanuts- finishing his first year with under 30mm? SAC was a 16mm launch I think. Few of 'bold faced' managers of today started with inflation adjusted portfolios of 2009 USD 1bln. (or anywhere close).
Posted by guest , May 12, 2009 1:03PM
@34- yep. and what does this mean for guys like adam sender? he's managing what, 100 mm?
Posted by guest , May 12, 2009 1:14PM
JPM could be asking HFs in that range to leave for a number of reasons, not just size, including financing revenue potential or lack thereof, strategy e.g. lack of trading in marginable securities, difficulty in servicing due to strategy, lack of execution revenue, low growth potential. I doubt they are turning away startups by well-pedigreed managers....they will position themselves for the next generation that way.
Posted by guest , May 12, 2009 1:18PM
Left out probably the most important reason...risk, meaning they do not want counterparty risk of certain types of funds (e.g. highly levered Convert Arb, for example).
Posted by guest , May 12, 2009 1:19PM
Left out probably the most important reason...risk, meaning they do not want counterparty risk of certain types of funds (e.g. highly levered Convert Arb, for example).
Posted by guest , May 12, 2009 1:20PM
@35 Sender is not PB'd there...dont worry about it.
Posted by guest , May 12, 2009 1:26PM
@39- 1) i wasn't actually worried about sender specifically, but the adam senders of the world. 2) why do you know where he's prime brokered?
Posted by guest , May 12, 2009 1:48PM
@40 thanks for clarifying...then to answer that question see my 36/37 above. It will all depend on those factors, but there is plenty of room for funds in that size to be well-serviced by others, althugh it does get tough if they are smaller and looking for FI PB and trade a lot of exitic products that they want all pulled together in one account. No comment on the where he is PBd.
Posted by guest , May 12, 2009 1:53PM
I can sort of understand reducing PB exposure for risk mgmt / Basel calculations, but I don't understand firing admin clients. There is no balance sheet exposure and the admin business is pretty high margin
Posted by guest , May 12, 2009 1:57PM
@42 It's actually very low margin and there is Risk exposure for screwing up NAVs, fiduciary responsiblity to investors in the Fund(s) to start. And it doesn't help that there are hundreds of admins with bad technology and high amount of competition. Very few actually do daily dirty NAVs that manager require and investors will all now be demanding.
Posted by guest , May 12, 2009 2:25PM
i heard they dropped peloton because aum went <1bio
fail
The Guy From Delaware
Posted by guest , May 12, 2009 2:58PM
@ 27
then what's the difference between JPM's PB and S&T desks? tech, leverage, shorting, exotic products (e.g., EM debt)?
-- PE (ex Lehman START)
Posted by guest , May 13, 2009 9:56PM
The PB business sucks for all banks, they are not making money.
JPM got all of the shit clients from MS and GS, all of the good accounts went to CSFB.
Posted by guest , May 20, 2009 3:52PM
@ 39 & 40. bear then got worried, now goldman
Posted by guest , May 20, 2009 3:54PM
@ 39 & 40. bear then got worried, now goldman
Posted by guest , May 20, 2009 3:56PM
@ 39 & 40. bear then got worried, now goldman