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Joining us now Daniel Pinzack, JP Morganschase President, Daniel, it's got to say you, sir.
Thank you for inviting me. It's great. Do you hear?
Do you feel happy? Do you feel lighter now? You know you're stepping down and retiring.
I do a bit. I've been in the company for more than four years. I add my contribution to the success of the company. The company is in an amazing place at the moment. It is the right time to embrace an next generation, to work with Jamie and prepare the company for the future and his succession. So I feel good about the opportunities company gave me my contribution. I'm looking forward to a very violence life going forward.
You are living the life that we all aspired to. Why now and what do you expect the next twelve to eighteen months.
To look like? So it's very simple in the next This has been planned for a long period of time, and now is the time for me to try decision in a very, very smooth way. This transition will go over a couple of years. I will my job will be to help the management team to continue advising Jamie and the bard In issues that there is strategic and important for JP Morgan and for the future of the company. So it is a right time. It is the right
group that I helped Jamie to build up to. So I think that I feel good about where the company is and where I am Now.
You've finish JP Morgan and it's affiliate banks for four decades a long time. You've been to a lot of devices. You've seen a lot of different cycles of enthusiasm. How enthusiastic is the optimism around the dealmaking and some of the mergers and acquisitions that could come down the pike.
I think that is quite anhusiastic. It was twenty four was a very good year too, so you think about them. An AIL historical average of volumes around four trillion a year in twenty three, it was around three point two last year three five. We think that this year could get to around four trillion, which is historical average. And most important, we hope that the timing PARTICU in the US to approve transaction is not as long. It's moved from twelve six months in the bus to running teen months.
Hopefully we go back. It's not just to announce new yeers also to close new There is an environment is said for that. Let's talk about the environment.
Is it just a regulatory shift that we need or do you find that four percent five percent interest rates of how people back as well?
I think that if you think about the US economy has grown very well in twenty four over three percent, is likely to grow over two percent this year, So the environment is good. I think that even that is an economy that you don't see and balances that tell you that is an economy that is about to go into recession. This cycle could continue for a period of time. There is plenty of monetization that needs to be done
in the sponsor space. There is essentially the evaluations in the US that are much higher than any other places is also incentivizing merging into US companies. So I think that it would be a good environment.
Which way to one bank yesterday who suggested that maybe these US companies could go on a bit of a shopping spring in places like Europe where valuations were depressed. You engaged in any active conversations right now in companies looking to do those kind of things.
So we are always engaged with clients all over the world, and there is a lot of optimission everywhere about what the US could do. So therefore, yes, there is dialogue.
Everywhere, so everyone sounds very optimistic. And then you go to some of these for as in the evening and people say there's a lot of enthusiasm, what actually will get done, we're less clear on, just simply because there is that question mark to John's point about benchmark rates, about the fact that the economy isn't slowing down so much, so why would they go any lower? And what happens if they go higher?
Still? Because of that and deficit, I tell you how I think about it. When you think about the US economy, isn't a good place here, not a balance is. Consumer is in a good place, the corporate sector is in a good place. Inflation hasn't yet got to the levels that it should be, and the deficit is high. And then you have policies coming from immigration, policies, started physical the policies and others. So at the end, this government
is about growth. So therefore I hope they will balance the implementation of those policies in a way that it doesn't either overhit the economy or trigger a recessions so I think that the hope is because of that, because the economy is in a good place, and certain things like rational revelation, I don't like to talk about the revelation. Rational revelation in our sector, in any other sector could be good for growth, but if things go too far, then the fact will have may have to hydrate and
deal with inflation. Hopefully it doesn't happen.
I guess what I'm getting at. Some people are asking what potentially to rail this optimism? Is there anything that you could see derailing this optimism this year at a time when people are basically counting on this sort of rational regulation or some of the other growth measures.
It's an extent, is what I said. Like inflation could be that economy goes a bit too fast and doesn't allow inflation to come down. That geopolitical space is still in a challenging place, though there is some signs of potential improvement there. And at the end, is like any other policy, you can do the right amount, you can
do too much, too little. Hopefully the right amount, the right amount is done in a way that doesn't really derail An economy that is not ready for a recession is an economy that is ready to continue to go at a decent pace.
Daniel, A lot's changed in your banking career, tremendous amount, and now a bunch of alternative asset managers are looking for the activity that traditionally was on a bank balance sheet.
Can you walk us through as.
You depart, how different banking might look in the years ahead compared to when you first started.
Well, it's very different. I think that is in a better place, with more scale, better quality of service, is a very quality of products, and a safer industry that probably has ever been. I think that if you are referring to private credit, I think that banks we've been lending for two hundred years and private credit is no more than a normal loan. So I think that we feel very good and where we are in order to
compete in that space. And at the end, so what is how we're rejected to be able to provide the best possible service to a client? So, therefore, what is it is in a certain transaction, you will be able to offer a syndicative facility or you will be to
offer that a lending facility. Both markets will tend to converge some way or the other, and we are in an amazing position to compete because we do have relationship with all those clients and we offer them not just the loan, We offer them a bunch of activities.
We saw a relationship developed between Mark Row and Apollo and Jane Fraser's City announced the end of last year. Are you exploring similar partnerships.
We have plenty of partnerships, several where we have go landing facilities with rather as the managers, and that they want to participate in the origination. The issue for all these funds at the moment is that they are getting a huge amount of influence and they may not be enough accests to deploy. So therefore, to have a partnership with someone like us, a city or any other to be able to participate in the origination of these banks
is a good thing. We are doing the same, not just with one, with as many as we can.
That kind of dynamic gets people worried. Not to be negative Nelly here, but you know.
Going to worries going forward.
I realized, Okay, I realized that I'm sounding pretty negative, but I'm wondering, given how much the flows have come in to the private credit sphere and how they've been searching for ways to be deployed.
Is there anything that makes you nervous within this ecosystem that's grown up very.
Quickly at the moment Now, I think that when you look at these funds, they don't have too much leverage. Their leverage one one and have times. So from that point of view, particularly in the more in the bigger space bigger loans, not so much. The only thing that made me post and think about it is there it's a lot of direct lending going into small business. There is a lot of lending going into the smaller side
of middle markets. And this industry in the current form hasn't been tested through a down turn cycle because when COVID happen, it was al subsidized by the by the different governments. So how these fans are going to behave in a downturn with small business is something that you want to be concerned about. It you want to keep an eye on. But I don't think that there is a systemic reissue in this space in the short term. The components are not there for that to happen.
Daniel find a question, how's the golf game?
It's okay, It's been the terror rage what's awfully what's the handicap? Now he has gone from five to eight. Hopefully I go back and do it now.
You appreciate your time, sir, Congratulations on a fantastic career, Thank you, thank you, and looking for the come in the next twelve months with.
Each say absolutely thank you.
Sir. Daniel Pins are there? The President of JP Morgan Shacks.