Wall Street loves a good second act. Larry Fink went from losing $100 million at First Boston to founding what’s now the world’s largest asset manager. Boaz Weinstein cost Deutsche Bank $1.8 billion, but he’s more than made up for it (if not for poor old Deutsche) since setting up Saba Capital, one of the world’s most successful hedge funds. Indeed, there’d hardly be a hedge fund industry if investors held previous failures against managers rather than pouring money into their second, third, fourth, etc., chances.
Still, even by the forgiving standards of the Street, incoming JPMorgan Chase CFO Jeremy Barnum’s redemption story stands out.
After a half-decade on desks handling foreign-exchange options and emerging-markets derivatives, Barnum landed in 1999 on the credit-derivatives team, where he could put his prowess with math and structuring to work…. When Barnum’s team lost a bundle, his name was added to a list of dismissals as the bank’s bosses set out to restructure the unit. He sent coworkers a tongue-in-cheek farewell email recommending that they closely study the career of Joseph Stalin’s henchman Lavrentiy Beria and get really good at PowerPoint….
Barnum was soon snapped up by BlueMountain, which named him head of its London office in 2005. The next year, the fund took a bath on wrong-way credit bets linked to Liberty Global Inc.’s Cablecom Holdings, prompting another ouster for Barnum.
In spite of the bridge-burning e-mail on his way out and his immediately stepping in it very expensively once again, JPMorgan brought him back into the fold just a year after the BlueMountain blow-up. There was just something about him, it seems.
“You get to know him a little bit and he’s just different than all the other Groton and Harvard people,” said Gus Christensen, a former banker who left Wall Street for politics. They’ve been friends since joining the bank together in 1994, when Barnum, armed with a chemistry degree, showed up in a second-hand Brooks Brothers suit…. “He speaks like a movie actor in the 1930s -- he has a little bit of a lockjaw. It’s not a way of speaking in English that I had heard from anyone else in my generation,” Christensen said….
Those distinctions from the other middle-aged white guys with elite educations at the bank aside, Jamie Dimon & co. saw something else in Barnum: that his penchant for fucking up spectacularly might be put to good use keeping an eye out for others about to fuck up spectacularly.
Instead of making wagers himself, Barnum would use his trading experience and the lessons he learned to help oversee businesses, spot risks and head off trouble…. By 2010, Barnum was indispensable to his bosses and on the rise, having helped the firm dodge bullets from the financial crisis…. He helped clean up one of Dimon’s biggest headaches -- the so-called London Whale trading scandal, in which a group that was supposed to oversee the bank’s excess cash lost billions on botched credit-default swap bets….
Some are keen to see how Barnum interacts with analysts and investors. He’s known to love a good debate, and is rarely at a loss for words.
“He’s the kind of guy, you would be sitting at a dinner table and talking about Russian politics in 1913, and he would still know more about it than you,” said Shahraab Ahmad, who worked for Barnum during his first stint at JPMorgan.
Well, that will definitely keep the analysts guessing, we suppose.