Interview With Ventresca & Myers: Masters in Business (Audio)

and the I p O divisions. Uh at JP Morgan. That's not their formal title. I'll read that off on the actual show, but you will find uh this to be a deeply wonky, fascinating conversation if you are at all interested in how I p O s run, in in how mergers and acquisitions operate, how companies make the decision to either go I p O or be acquired or make an acquisition. Uh. This gets into a lot of the nuts and bolts of that process. I found

it to be really quite interesting. It it's rare to not only speak with to highly placed people within Wall Street banks like this who are not the face of the firm not on television and radio all the time, but really, um, are the people who roll up their sleeves and and get the deals done. Uh. It was really an interesting conversation. Was also the first time we

had a conversation with two guests at once. The three way discussion a little bit challenging for me as the host to try and figure out how to coordinate that and to to bring both of them in. UM. I've

said this before, I'll repeat it again. I have no professional radio background of training, and when I watched the pros do it, when I watch guys like Pim Fox or or Tom Keane or Charlie Rose run a conversation, and I have really tremendous respect for how skilled and talented and and just experienced and knowledgeable those folks are, and and and how effortless and easy they make it look. When when you've done a hundred of these, you realize, wow,

this is much harder than that appears. So for those of you who are at all interested in investment, banking, in underwriting, I p O S, syndication, and mergers and acquisitions, I think you'll find something interesting here. Uh. They both have a fascinating background undergraduated Princeton and then they each went to different UH schools for for MBA's. I think you'll find this to be an interesting conversation. So, with no further ado, my conversation with Chris Van Tresca and

Liz Myers of JP Morgan. This is Masters in Business with Barry Ridholts on Bloomberg Radio. My special guest today is a pair of bankers from JP Morgan. I have Chris Van Tresca, he's the global co head of Mergers and Acquisitions, and Liz Myers, she is the head of global equity capital markets. Chris has advised on over one trillion dollars worth of announced transactions, be they strategic acquisitions,

mergers and sales. Liz has done not quite as much, but almost as much in terms of global equity capital markets, including I p O s, follow ons, convertibles. They each went undergraduate to Princeton. Liz has an MBA from Harvard, Chris has an MBA from n y U. Chris and Liz,

welcome to Bloomberg. Thank thanks for having so let's jump right in with what you do, Liz, for for listeners who may not know what exactly are global equity capital markets, Well, the Equity Capital Markets group is really the equity underwriting group at JP Morgan, and so we are responsible for I p O s, follow on offerings for public companies, convertible securities that companies issue, and equity private placements. So companies that are looking to access equity before they go

forth with an IPO. And I assume you may do some work with the M and A department as well. We do. Chris and I have known each other for many, many years, and we do spend a lot of time on certain client transactions together. Um importantly, it maybe acquisition finance. Uh, it may be a dual track I p O and sale process. So so let's talk a little bit about

the state of the business these days. Not too long ago, there was an article in the Wall Street Journal that said I p O s were at a twenty year low. What are you guys seeing in either equity capital markets or in mergers and acquisitions? Does that sum up the state of the street accurately to you? Well, I think it's really This year has been a tale of two cities. The first part of the year as much lower in terms of volumes, and now as we've passed Labor Day

and entered into September. As expected, We've seen a huge resurgence in the I p o market and broadly in the equity capital market, so volumes are up substantially. I had mentioned on Bloomer TV back in August that we expected to have over twenty I p o s launched in the month of September, and that statistics still holds holds true. So a lot of exciting things happening on our platform. How typical is that for what we usually

see in the full of each year. Well, the fall can sometimes be a catch up period from a slower summer, but this year in particular just seems livelier than ever

across all sectors. It's interesting to see that some of our largest deals on the platform are coming out of Asia, so just recently pricing the China Postal Savings Bank I p o UM, we have an interesting privatization on the road in Asia, and a variety of different billion dollar plus I p o s. Before I get to Chris's M and A work, one would imagine that Asia has been ascended to the as few years. Is that a

fair way to sum that up? Well, I think it's it's continued to progress, particularly sentiment wise, when earlier in the year there was a lot of concern about Chinese growth slowing, and I think we're seeing more and more signs of the macro backdrop improving, whether it's steel prices, new projects, starts. On the industrial side is starting to feel a lot better, and the Chinese consumer is always of great interest. So christ let me ask the same question to you about uh, the M and A business,

the emergence and acquisitions business. What is the sid of the street these days? How active is it? What do

you see? So you really have to start with last year was this historic M and A market, huge volumes, driven by lots of companies with great balance sheets, a lot of access to capital, but very weak organic growth and their stock price and then multiple was anticipating ability to grow, but what they looked in their own business plans, they were struggling in this global economy which has been pretty modest. How do I find that stock price are shiation and growth in my company? Let's use M and

A as a tool. So last year historic records very much by side driven M and A activity. Companies that could afford it, looking for smart synergistic acquisitions, and as we moved into this past year, much of that has continued. The actual deal count is down about eight percent when we tracked the number of transactions two fifty million dollars

and greater, so it is a little lighter. The mega deals, the ten billion dollar plus deals are down greater than that about so a lot of the headlines may say, oh, M and A is not that busy, it's a lot slower than last year. But what we're feeling and actually experiences a continuation of an extremely healthy M and A market. A lot of the themes that were in existence last year are still here today. Very strong access to financing,

meaning historically low rates for debt financing. In size companies that generally are trading at a pretty healthy stock price multiple are able to use their equity as an acquisition currency. So if I'm a buyer and go get debt to pay for that purchase price, I can use my own stock and I'm leaning into that if it's a smart deal, that's bolstering what's likely still from any companies weak organic growth.

So so let's talk about that cheap fund and saying I've heard from people on the street you know, the FED is the only game in town. If it wasn't for them, none of these fill in the blank mergers I p o s share by backs would would take place. Seems like an overstatement. How significant is the Federal reserve

to what what both of you do? So when we're talking with our clients, it always ends up coming back to what's the underlying growth in their business, which is heavily linked to the economic outlook and the growth they're seeing across the globes. So in an environment where there's been low rates, that's largely been because the global economic growth outlook has been so weak. So those companies from an M and A matter in that environment have low organic growth and are using M and A as a

tool to bolster their growth profile. Even if rates go up, the answer maybe, well, where it's a going up because the economic outlook is improving, so those companies are gaining extra free cash flow. So even if rates are going up for the right reasons a better global economy, I think that will just continue to support a healthy strategic dialogue among companies. Buyers will still look for ways to

put that capital to work. And then if I'm a seller, typically what I found last year is if my stock price was trading at almost an historic high or at least a fifty two week kai, and someone showed up with an acquisition premium, and then I compared that to what I was able to deliver on my own. You know, I may say, hmm, that's pretty good deal for my shareholders. Why don't I crystallize that premium? And the right answer for shareholders to sell my company. I'm Barry rid Helts.

You're listening to Masters in Business on Bloomberg Radio. My special guest today is Chris Ventresca and Liz Myers of JP Morgan. He is the global co head of Mergers and Acquisitions. Liz is the head of Global equity capital Markets. And let's jump right into what these processes look like from the company's perspective. Walk us through a process. How does a deal begin? If someone wants to either go I P O or do an acquisition or merger, how

does that process begin from the corporate side? Well, I'm happy to start. I think the company side for an acquisition really starts with that company's strategic planning process that the senior management team, the board, and very often us as bankers advising them are part of where do you want to see and take your company in the next three to five years. What areas either geographically or product segments or customer segments are we in that we want

to grow? What areas are we missing that we think we should be in as a competitive matter, And then the conversation shifts to are we able to accomplish those objectives are on through capital expenditures or R and D or is that not possible? And maybe there is a target out there that fits very neatly into our strategy as an acquisition candidate. That's the classic building or buy it correct and very often that's a discussion that happens

over years. So a company is thinking about its own prospects, it's plan its performance, trying to assess where it's competitively strong or weak, and then coming up to some conclusion about this is a part of the world we need to be in. How can we do that. This is a product we're missing, or capability or technological capability or expertise that we're missing. Can we build it? Can we buy it? Who's out there if we want to buy something.

Let's now talk about potential candidates around the globe that could be interesting puzzle pieces for us to put into that and that again is something company starts with. We're by their side helping them think about it. Where we become very helpful in that is sanity checking that strategy and helping identify companies around the world that may fit into the solution they're looking so that that's fascinating to hear that it's a multi year process. The public here's

about some crazy idea gets floated. One was that Apple was going to buy the claren came out of the f T. I have no idea if it's true. I'm not going to ask anybody. But the way you're describing it is this fits into the broader context a long term strategic plan. It's not just hey, shiny orange car, let's get those. It's a very very different approach. Yeah, just to reiterate, it is very very often a multi

year process. And even when you identify that target, there's then and the bankers are now getting more about We're helping them think through how do we value that target, what's the price that's appropriate to pay. Do we think they'd be willing to take that price? And sometimes with

the market volatility, and stock prices moving. Sometimes the advice is, let's wait a quarter or two to just see how the dust settles with regards to some news announcements of their performance, and let's have a strategy of approaching and even once you approach it, maybe another few months or quarters before you actually get to the point of being very definitive on this is the price I'm prepared to pay?

Are you prepared to accept it? Type of conversation. And again that could last certainly months and often into years. So so, Liz, when you work with companies that want to go public, the assumption is, especially with startups and tech companies, that's the exit strategy down the road or is it still is it? Is I p O the endgame as much as it might have been uh some years ago. Well, there are really three reasons that a

company would decide to go public. One is they're looking to accelerate growth, similar to the theme that Chris mentioned about why they might be looking to make an acquisition. The second typical reason maybe that they have a balance sheet that's a little too levered for their comfort zone, so they'd like to raise some equity capital and pay

down debt. And then the third factor that may weigh in is they may be owned by a financial sponsor who's looking to begin the process of exit after three, five, ten years UM, so that can be also a driver of an ip O. Someone sent me an email complaining about the lack of public companies that one point in time, the Wilshire five thousand actually had five thousand companies. So what do we see as the trend in in companies going public? We've heard a lot of complaints from company

as well. It's easier to stay private. Uh. You see Uber has had no problem raising capital. Is this a real issue or is this Uh? People just complaining for the sake of complaining. Well, we have a brisk equity private placement business. But what I would say is that it's not a one size fits all type of approach. Not every company is looking to raise private capital. It's typically more dilutive than doing an I p O UM, and they really private equity is more dilutive than an IPO.

Not always, but oftentimes the company is earlier in its life cycle, so they may not have predictable earnings, a visible or transparent revenue stream, so there's a lot more risk inherent. Often in companies that are earlier stage and less mature than when they ultimately get to being I p O ready, where we often would recommend that they have good transparency in their earnings, a stronger balance sheet,

so just d risked and more mature. So that sounds like a checklist for how to run a successful I p O. What are the other factors and pitfalls that are out there? Sure? Well, I'd say certainly, having being involved in a growing and attractive sector is checkbox number one. Secondly would be having a really attractive niche within that, so leadership within an attractive sector, having a business model that is easily understandable and transparent, having a strong balance sheet,

and lastly having strong management. Helpfully to have management who's had public company experience but not required and oftentimes companies that have helpful and credible strategic backing from a private equity firm or venture capital investor. How about you, Chris, what's your checklist for a successful acquisition? What what works and what doesn't? Yeah? I think the key is you go back to what are we good at? What are our core competencies as an acquirer, and can we apply

those to this target? I think where companies get in trouble is they stray too far away from what they're good at and they try to expand into areas that they're not as familiar with or don't have the capabilities. So always stick to your knitting, stay in your lane. You know those phrases we use a lot with companies

and their boards. The key then once you realize this is a business we can add value to and we understand and we have the skill set and it's filling a need that we have, then we very quickly well, what is it worth? And do we pay a price that actually gives us a return that's better than our cost of capital Because you may find that great target, but if you overpay for it, that's a destructive element

to shareholder value. So where we'll end up working very closely with our clients is just that question, what is this business worth? What synergies are created under our ownership? How much of those are we willing to keep for ourselves or potentially pay away in a premium, And have that discussion and ultimately a negotiation with that seller who's on the opposite side of that dial, saying what is

my own self worth? What are my prospects. Is someone offering me something that's better than I can do on my own. Maybe it's a stock deal where I don't need to just close the file on this, My shareholders are getting a new piece of equity that has upside to it. Or maybe it's a cash deal where I truly you know, three months from this announcement date, we're going to close our shareholders again and get all cashed out.

And how do I feel about that? Did they get enough return above where the stock was trading to make us all feel good that that as a board we did the right thing for our shareholders as a cash seller, those are the key questions we deal with and work companies. Coming up, we continue our conversation with JP Morgan's Chris Vantresca and Liz Myers, looking at the relationship between education and finance. I'm Barry Riholds. You're listening to Master's in

Business on Bloomberg Radio. My special guests this week are twenty year veterans of JP Morgan in both the M and A and global equity capital markets. Chris Van Tresca is the global co head of Mergers and Acquisitions at JP Morgan. Elizabeth Myers is head of Global e c M Equity Capital Markets. Both of them have been with JP Morgan for twenty years, and I guess literally have decades of experience in the space. Let's talk a little bit about your educational background and what's needed for this

sort of work in finance. Liz, you have an economics degree from Princeton undergrad Chris you also went to Princeton and and have a Bachelors of Science and Engineering in electrical engineering, a little bit unusual. And then both of you have n b as. Chris you at at n y U, Liz you at Harvard. So the first question is pretty straightforward. You each seem to have taken slightly different paths to work your way into finance. What did your educational background lead you towards in terms of of

what you wanted to focus on as a career. Senior year in Princeton getting my electrical engineering degree and interviewing around and realized I didn't necessarily want to be an electrical engineer, but I loved problem solving, I love analytical situations, and I did enjoy being around people and being a

part of a team. So I had branched off into different areas of either consulting or computer programming jobs at different types of firms, and JP Morgan at that time and still does today, offered what they called a Global Technology and Operations training program where they took folks like myself and became computer programmers or technical folks to help bankers.

And I was always intrigued by the financial markets and finance in general, and the opportunity to help bankers think about how to value companies, what tools do they need the analytical tool set to help them do their job was very interesting to me, so I joined the firm on that basis actually spent many years doing that job, which was supporting bankers with all the analytical tools that they needed. As I did that function, I also realized

I liked their job a heck of a lot. So I went back um at night part time at n y U cern School of Business and proceeded to get my m b A and finance great managers great mentors along the way early in my career, supporting that I was able to do that while staying at JP Morgan, and ultimately made a career change once I finished my m b A. This is now the mid nineties, I switched over and became what we call an associate in our investment banking program. Became a young investment banker picked

the M and A Group at the time. I loved the valuation aspects, the analytical rigor around analyzing companies. I'd like the tactical side and strategic side of advising companies and that whole thought process. It appealed to kind of my core competencies as as well as what I just saw and watched others do with great enthusiasm. So I jumped in with both feed into the M and A Group in the mid nineties and fell in love with the business and have just essentially grown up at JP

Morgan in that business, taking on greater responsibilities throughout the years. Liz, you you took a more traditional route economics to M b A. How did you find your academic background helped you in your career well? As an economics major, it was a more natural path that I might end up interviewing with financial firms. And I remember meeting Chris in the early days of working at JP Morgan when I was an industry coverage banker and then in the M

and A Group myself. Um, So I had a really great experience as part of the JP Morgan Analyst Training program, and after my work in M and A, I started to think about spending more time in an area where I could have more exposure to the equity markets. I grew up in a family where neither of my parents were financial professionals, but they both really had a passion for the stock market and we used to laugh at they each had their own individual subscriptions to the Wall

Street Journal. So I had an interest in the equity markets, and when I returned from business school, I decided to make the transition into equity capital markets and just love the opportunity to work with so many more clients on a regular basis. M and A is a group where you spend a lot of time deeply into analyzing one particular company or situation, and in E c M we have the benefit of being able to study and learn about so many different companies and advise them along the

path of raising equity capital. And while I'd say my major and economics was relevant as in terms of making me an attractive candidate, at JP Morgan, we hire majors of all types, everything from classics to electrical engineering, and I think Chris and I we spend a lot of time doing Princeton recruiting and spending a lot of time on campus because that's our alma mater and we we

feel quite loyal to it. But I think we're both quite good at identifying what are the right personality traits, skill sets, finding those folks who have expressed interest in our field, and you combine that with JP Morgan's very powerful training program, we can create a dynamic where young people can be very successful and impactful in our field. And it's really fun to be able to watch young bankers then grow up and start managing their own deals

and telling us what to do. I'm Barry Hults. You're listening to Masters in Business on Bloomberg Radio. My special guest today are the co head of Global Mergers and Acquisitions at JP Morgan, as well as the head of Equity capital Markets, Chris Van Tresca and Liz Myers. Let's jump right into the process from the bank's perspective of what it's like during either an acquisition or an I p O. First question, how do these deals find their way to you? Is it the basis of a longer relationship?

Is it always in flux. From the bank's perspective, how do these things come along. We start relationships with our industry coverage officers and those those relationships span many years and it it's not a typical that I might meet a company three years before it goes public, sometimes five years um, and there are other situations where it might

be with just a year out. So we're really combining that relationship within our industry coverage area with the product expertise at the right time, and that allows us to really help a client along the path of decision making because they may in those early years still be considering whether an I p O really does make sense ever, or whether they might decide to expand through acquisition or sell the company or stay status quo, private and and

happy for many years. How competitive is it when a company decides we're gonna I p oh there are a number of big banks on the street. In my mind's eye, it's a very sharp elbowed competitive fight. What does that look like from the bank's perspective, I'd say there's a mix of situations. There are definitely the as we call them, the big bakeoffs, where there might be a number of competitors in the mix and companies and their financial backers might be interviewing a series of banks in a single

day or week. And then there are other situations that are more correlated with the setup I described of of a multi year relationship with our firm where the client never feels that they need to interview others because the advice and trust that's been built over many years is

so strong. But it is a very competitive dynamic, and I think what clients are looking for is a combination of that trusting relationship but also very strong expertise and track record in doing numerous complex deals or deals that look very similar to what their situation might look like, combined with a lot of deep industry expertise, support on the research side, vast distribution network. Those are the criteria that most issuers and financial sponsors will think about and

where we check those boxes quite well. Have been on the M and A side similar sort of timeline, and and it's very similar in terms of our relationships with clients has measured over many, many years, some of these clients multiple decades, and we've become part of their team and their partners and really focus on being their trusted advisor.

Willing to give objective advice, think about their strategy, their business, and give them our input, and then when there's some observation, ah, we are deficient in this area, it becomes a very natural dialogue to say, well, let's talk about acquisitions and here's some names that may make sense. And by definition, as we're having that dialogue, we're getting a little deeper and ultimately will just be their natural first call advisor on that deal. So that's really what we strive for.

It happens in the majority of our cases where the client relationship just lends right into been an active project and potentially an active deal, not much of a bakeoff on the M and A. So I for obvious reasons, everything has to be kept a little a little quieter than perhaps an I P O. That's a fair point too. I think confidentiality isn't key, and for clients and boards to have a team that they trust, they know there's continuity in that team, the same people that they've got

to respect and learned from over years. Is that same team helping them on a deal. M and A lends itself to that trusted advisor type relationship, which again is built over the longer term. Every now and then, these are fun phone calls to get you know, I'll get I'll get the phone call or someone on the team will get the phone call of I don't have a relationship with JP Morgan, but I've heard such great things. We're considering to sell ourselves. Can we come meet you

or can you participate? We're gonna call a couple of folks, or think about adding you to a team. And and again we do have those opportunities. We do welcome them and and do enjoy you know, pitching or meeting you know, new clients, But the vast majority of what we do is long term relationship. So walk me through the process. A company has reached the conclusion we either want to I p O or we wanna acquire somebody or be acquired.

What are the next steps? Like what actually takes place within the bank when an existing client says, Hey, it's time, we're going to ring the bell. Let's do this. How does the ball get rolling? Probably the best example that will touch on both the M and A world and the equity capital markets world is when a company may have a division or a subsidiary that they determine, usually with our help, is non core or maybe more valuable

in someone else his hands, in their own hands. So then as we're evaluating that, we'll say and think about, Okay, what are the alternatives for this non core division? Can we run a cell side? What would that look like? Who the buyers, what would they potentially pay, what's the tax implications of that? What are the proceeds we would receive? So we'd be doing that analysis and forming a view in our best judgment about those outcomes. Similarly, for that division,

is it a public market candidate? Could we I P O it? Could we do a spinoff? Is it capable to be a thriving equity story with new investors? What does that look like? And ultimately we'll bring all that analysis back and talk about it with the CEO and the board and the and the rest of the management team and create some potential outcomes and judgments for them to then make a decision. We like both outcomes, we like potentially running both in parallel and seeing which one

ultimately delivers the best for our shareholds. I e. A sale of this division or a spin off or I p O. Let's now create a timeline and a work plan. Let's prepare all the relevant materials for that. Ultimately, there's a point you have to start to make outbound calls to buyers, and there's a point you start to do SEC filings. To extent, it's an i p O and you just map out a project plan and a work plan and go along. You know that timeline. Usually in

that case, we're working very closely together. The M and A team, the industry coverage team, and the equity capital markets team are all working very closely together assessing those alternatives to maximize the outcomes for our client. We're speaking with Chris Francesca and Liz Myers of JP Morgan talking about I p O s and mergers and acquisitions. Similar question to you, Liz, A company says, all right, we feel like we're mature enough, we have enough revenue, we're profitable.

We've decided we want to go to I p O. What does it look like from the bank's perspective, What what sort of steps follow that decision? Sure? Well, the decision to I p O is one decision, and then the next part is learning what the appropriate value equation might be, and that can be taking place in multiple parts in the process. When when Chris was mentioning if a company was looking at both sale and i p O, they might regularly be where they would be regularly with

us evaluating the relative valuation of those two camps. UM. It's also part of the pitch process when we're meeting with clients and expressing our own views around their equity positioning and their valuation. So that's very much a part of thinking about when to I p O and whether it makes sense to do that versus a strategic sale.

So once we get going and thinking about how to refine valuation thoughts, which may change along the way depending on business the businesses own development or market conditions, the value of peers that they may be medge marked against, so it's not always a fixed point in the analysis.

But as we go forward thinking about that, we're also defining and refining the equity positioning, which is what is the encapsulated description of this company and the investment opportunity for buyers, So thinking about how to size their market, what type of forecasted revenues might make sense UM and those are and those that part in particular our research analysts can be helpful with and the company is not

required to commit to specific forecast targets. But the by side is trying to learn what's reasonable in terms of the type of revenues and earnings that a company might produce over time UM and then they also have to analyze. The by side has to analyze very much, and we provide our thoughts and help with this. What are the risks of this investment? What's the downside? What might cause

the company's stock price post IPO to trade down? So they have to be very thoughtful about that, and and we not only for the pursuit of being helpful to the full analysis, we also have regulatory obligations to talk about anything that could go wrong with an investment. So when we look at M and A and we look at I p O s, I p O s typically involved many different companies helping to bring the target company public. And I have looked we've all seen books who's in

the prime position on the cover? How often are you working with multiple peers on the street to help bring a company public? And what's that process like to coordinate this with with other bankers UH that are a participating in the underwriting. So there are a number of parties typically on an I p O and the lead bank is called the lead left underwriter, and they're typically orchestrating

the process of of including other banks. Other banks are included often for research capability, so having just another voice in the market with a slightly different version of how this company could be an attractive investment for the buy side. So it does require great teamwork and as a result, I know many of my peers quite well across the street.

And when you say lead left, obviously that's the top left corner of the underwriting prospectives the book that everybody gets, and then the distribution of other banks are all over the cover. How much jockeing goes on with that, There is some jockeying that goes on, and sometimes um, you'll realize that the lead left is just the most highly

paid bank. And sometimes the cover might have a couple of banks that are are paid equally, and they might be alphabetically listed, so there might be client might pick two banks that they feel equal comfort and capability in. But ultimately, UM, there are companies also like the I p O for the opportunity to keep relationships with other banks that may have provided them with helpful financing over the course of their history and may look for that

in the future as well. So there are a variety of reasons that clients like to have more than one bank on a deal. But it can be sometimes a lot to orchestrate. But we're quite good at it because it's it's been the dynamic for sometime. But it does really require UH the ability to manage a process in an almost militaristic way UM and have really good communication

across the whole syndicate group. Brought to you by Bank of America Marylyn Inch, committed to bringing higher finance to lower carbon named the most innovative investment bank for climate change and sustainability by the Banker. That's the power of Global Connections. Bank of America North America Member f D I C. I'm Barry rid Helts. You're listening to Masters in Business on Bloomberg Radio. My special guest today is Chris Ventresca and Liz Myers of JP Morgan. He is

the global co head of Mergers and Acquisitions. Liz is the head of Global Equity Capital Markets. So let's take a typical ten billion dollar deal, be it I P O or M and A or even a smaller deal. What do these look like? What's the structure look like, how many people are working on this from from the bank's perspective, what's actually happening? When okay, everything is green, let's go forward. What does that look like? Well, I

can start. There's a few different types of examples. I'll just pick probably the most complex, which is a sale of a company where the buyer could be anywhere around the globe. So typically what we'd have is a very

senior team talking with the CEO and the board. So that could be two or three senior bankers, industry expertise, M and a expertise just relationship, maybe in a particular country where that company is located, and that senior team, which hopefully has built a decades plus long relationship and knows that company extremely well. Well. Then add a couple of layers below our title structures the team right out of college. The undergraduates or analysts NBA equivalent types are

called associates. The vice presidents, executive directors, and managing directors the most senior, and there's usually one person in each of those levels. The more junior part of the team is and saying, Okay, we have this idea that maybe this company has decided that it's prospects are better to sell themselves than what they can do on their own.

What what is the value where the business plan. Let's create a financial model that takes their business plan over many years into the future, maybe runs it to a discount of cash flow or looks at other comfortable So there's an analytical part of the job that a core part of that team is working on fine tuning, working with the clients, spending time with the client, asking diligence questions, understanding all the assumptions, and ultimately that team, from from

the most junior to the most senior, forms a point of view is that your business plan or what you think you're able to deliver is worth I'll make up a number a hundred dollars a show, and maybe we then assess where the stock price trading, and we assess is that good enough? Is that enough for our shareholders or is there someone out there that could see us in a different way that may pay us on your fifty dollars a share and is that a good idea

for our shareholders to to do that. So there's that first part of the team that's kind of internally working with the client and then there's the question that's often in the boardroom with the most senior bankers advising, saying, okay, what is the next step? Here? Are there people around the globe that may value your business more than you're

able to deliver on your own. And then our global franchise plays right into that strength of understanding companies around the globe, having senior bankers sitting in countries around the globe, and in a confidential way, extend that team to include that right level of expertise. You know who in Asia, who in Europe, who in Latin America, who in the US or Canada may make sense as an owner of

this business. Let's talk about that with our client in a very thoughtful way, because we know those folks and we know how they view a business like us, and we probably have history around their credibility or ability to pay. And let's get the approval with the board's blessing to say okay, let's run a cell side process. Um. So that team really depends on the type of project I

just described. Something that's a very global team. There's kind of a core team working closely with the client that extends globally for the benefit of the client, so that we may be able to introduce them to a buyer that's in a part of the world they've never thought about or never been to, but because we know a client there, we kind of have a sense of what's interesting to them. We create that introduction and we're able to have them visit and have a local banker in

market maybe perform that introduction. And the team therefore could range from three four, five to you know, depending on the complexity, and that's really just as people or can they can generally speaking, and if you if you end up them branching off into different types of transactions where maybe there's acquisition financing is needed and there's different ways to do that financing, bid bank financing, bond financing, investment grade bond, high grade, high yield bonds, a different set

of expertise is needed. Or maybe that's a cross border deal where you need to pay in Euros and you're a dollar denominated company, so we'll have FX specialists become part of that deal team to explain are we able hedge this, what instruments are in place for us to de risk the transaction using potential you know, interest rate

or foreign exchange type edges. So again, one or two or so people could get at it confidentially into that team to work with the client because that's their specialty and they can then you know, have the benefit of talking with the client about that. So these teams could grow depending on the topic and depending on the level of complexity. And I'm assuming that each of these people are working with a a cohort on the corporate side, be it the CFO, the CEO, or whoever their team

is is putting together. So there's probably, uh, my assumption is there's a lot of bodies being thrown at a at a pretty big deal on both sides of the table, the company side and the bank side, and correct and

depending on the nature of the deal. There are situations where confidentiality is so important it would be very disruptive to that client's business if there was a rumor, if it aim known to the employees or customers as suppliers that they were considering something before they actually had it

in hand. So there are situations where they will work with us exclusively and will commit and they'll commit even as a senior management team, not to go too deep in their own organization and we'll do the same as small tighter group as possible, and again that may just be a handful of people that are working in that case for the the logic again of let's keep this as tight as possible, because the sense of there are other situations where a company decided to sell themselves and

because they realize they need a lot of help of their own internal people may announce publicly we're reviewing strategic alternatives, including a sale, so they've publicly told the world and their employee base that's happening. That's obviously a little easier, easier than it's a little less sensitive, and the teams could be larger in cases like that. You're nodding your head, yes, Liz, is it. Do you see some similar sort of teams

working between companies and the bank? And I assume you don't have the same need at least in the I p O space of secrecy. But what about the add ons and the syndicates, things like that where it could be disruptive if it leaks out early, Hey, we just did an IPO when there's another of stop hitting the market,

how do you deal with that? You're absolutely right, the team for an I p O and the stage in which the broader group would be included, would be much earlier because you maybe filing a public perspectus and you're you would want your salesforce to be aware that this deal was coming in let's say a few months UM.

So we think of it as in our group, there are four to five people in the equity capital markets group that would work on any transaction, and a similar number of people in the industry coverage, relationship banking area. We also have a research analyst who if it's an I p O maybe has a has a team of one or two people joining them. They would be involved much earlier in the process and would help us UM and we would help them get up to speed on

the on the story. They would spend a lot of time interfacing with the issuer client and really developing their analysis, forecast positioning of the company. They would be doing that independently. UM. Then we have the salesforce who gets involved all over the world. So that's a much more significant group. And to your point, if you are doing a public equity a public company's equity ray is a follow on for

let's say acquisition or debt reduction, etcetera. That's something we would keep the information on we call it on our side of the wall, So just the equity capital markets professionals and the and the bankers and the research analysts would be told only right before the transaction is ready to be launched, so they have a couple of hours to prepare, but ultimately they're going in and we're leveraging

their historic knowledge of the company. Um, and so it's kept very much on the inside of the wall in those circumstances, and the salesforce would find out at the exact same time as the rest of the public market. So um, it's it's definitely a divided environment when you have a public company issuing equity. You mentioned in the

lead time. I've gone to a number of road shows pre I p O and some of them are pretty straightforward affairs where it's relatively um, just nuts and bolts, and others are very flashy, you know, whiz bang presentations. What this is sort of an on the fly question. What goes into creating that? Who drives those decisions? I mean, obviously if it's a company like Tesla or somebody that's flashy and and and very forward tech, might be a different presentation than a sort of uh, just running the

mill plane fintech sort of company. But but how is that process put together? How are these road shows assembled? And how again another personnel question, how many bodies are thrown at these things? Right? So I would say there's there's a little bit of a culture by industry around how flashy as you would say, an I p O launch might look um and so that's that can vary by sector. But ultimately what you're looking to do is

make sure you're getting significant visibility for the deal. And I always say a good deal sells itself and you don't need the flash to be able to get the eyeballs. Is if the financial profile of the company and their leadership in their sectors is notable, the eyes will find

them without too much effort on our part. Some clients just have a culture um as an issue where client have a culture of a more um flashy persona and they enjoy the splash of leveraging the I p O event to actually increase visibility from a cut from their

customers perspective. UM. So it's kind of a free media event and we'll see the New York Stock Exchange in the NASDAQ also contribute resources to help in that regard when when we're doing an I p O. UM, But ultimately it's it's really about the quality of the story and does the valuation make sense, And that's what really drives how subscribe something is and what sort of interest

there is on the street. I did blow through so many questions I want to UM, I want to just go back and take look at a few we missed before I get to the the standard ones. UM. You mentioned aftermarket performance and add on what what what determines whether a company does UH poorly or well in the aftermarket and the one that really stands out, UM, And I don't want to ask specific questions, but you know,

the Facebook IPA was widely considered a flop. They had the technical problems, the stock traded down afterwards, and then they had I think it was about nine months later they had their mobile announcements, and there's been no looking back. The stock has gone straight up, straight up. When you look at an I p O like that, what is it that makes any given I p O successful or less successful? And and was that kind of a unique one off situation at Facebook? Because I think it looked

like especially giving this nephew with NASDAC. It looked like that had a couple of one off issues. I wouldn't take Facebook as the right case study for thinking about what drives the right aftermarket because there were some technical issues. As you point out that we're pretty unique to that situation. I think as a general matter, overall demand combined with allocation strategy is what drives the aftermarket, and they're intricately related.

What is allocation strategy? So allocation strategy means you have a list of let's say a hundred and fifty accounts that have come into an I p O and you have X amount of stock to distribute amongst all of them. So that's a very as not an automated process. It's very manual and it's very um conversation based where we're really putting together a lot of information. It might include feedback from the issuer client about how they felt that

client that investor understood their business um. We also will factor in what price limits an investor might have placed around their order. That may, depending on where the deal is priced, may exclude them from even being eligible for an allocation if it's if the the arket clearing prices above where their limit was for example. But ultimately, what we're really trying to do is have a deal that's

an average sized deal. You were shooting for a multiple time subscription, so you have excess demand versus the amount of shares and their scarcity value, and that demand tension helps with the aftermarket and the strategy of allocation is to allocate less than what an investor would ideally like, but enough to be meaningful so that the resulting dynamic is they go and round out their allocation in the aftermarket.

So they're looking to fulfill the demand they placed with us in the aftermarket as well as through a partial partial placement by US shares directly from the I p O. So this process sounds subjective and very much more art than science. Is that is that a fair way to describe that. Let's say it's a fair way, and we do it with great thought and and conservative approach and an inclusive approach as we think about what our issuers

interests and preferences are. But ultimately, i'd say issuer and underwriter's preferences are always aligned to have a positive aftermarket so that this event of of bringing buyer and seller together results in a long term partnership. So before I jump back to the m and A side of it, there's always seems to be a battle between do we price it high and maximize dollars to the company, or do we price it a little lower so that there's more participation and over the long haul it seems to

work out better. How is that dynamic tension resolved? Again, it sounds like it's more art than science. So that can either be an easy conversation or a multiple hour conversation depending on the circumstances and the complexion of the order book. So sometimes it's very clear from just showing the order book to an issuer client that the market clearing price is top of the range or middle of

the range, for example. UM some issuers will ask what would it look like if I priced the deal a dollar higher, And so we have to try to interpolate from the data we have what that might mean in terms of aftermarket performance. So we'll give some guidance which is just our best estimates for what that change might mean. But we can for sure show them what accounts would drop out of the book, and so what would their subscription level reduced to if they push price higher? For example, um.

So sometimes there is some nuances and maybe a dollar a dollar difference is hard to ascertain a meaningful difference in the aftermarket, and sometimes it's extremely clear where you may have an order book where if you went one dollar higher you would lose half the order. So you have a lot of visibility when people say, oh, you know they price that too low. They left all this money on the table. You really don't know what's out there aftermarket, but you could see what the immediate demand is.

So you're really working within a framework that's at least on the I p O pricing that seems to be a little more science than art. Beyond that is I guess where the art comes in. Is that a their way to describe exactly And we're never solving for just how to allocate the stock for that moment. We're solving for making sure that the deal trades well so that the company's reputation is enhanced by this event rather than hurt by it. So it's it's not just about maxing

what you generate from the underwriting. There's always a balance, right, We're we're looking to optimize price. So the issue where gets the absolute most proceeds that we can deliver while still having the stock trade well in the aftermarket. That's the magic number, and there's going to be some trade

offs between the two of those. You could take something perhaps generate a little more underwriting income to the company, but at at a cost of how well it trades after right, we might do We could have a situation where we've created more proceeds by moving price let's say a dollar a share, but then the aftermarket doesn't trade as well. And if you think about in an I p O typically depends on the circumstance of the region. Let's say in the U S. A typical I p

O might be of the company. You don't want to lose value for that other percent by focusing too much on proceeds realized on moment one. So there's some art and science to pricing I p O. I always look at at acquisitions or sales of companies as more of a poker game where you're playing against a number of

other players, potential other bidders. What's it like when you're in the midst of trying to acquire a company and another buyer comes along and throws a bid in uh and sort of toss as a monkey wrench at what you have going. Let me let me first link back to what List said, because there's a very interesting analogy in M and A. When you're doing a deal as a target for all stock, or maybe it's half stock and half cash with an acquirer, so a more merger

like deal. This same tension happens when I'm on the cell side. If I get a greater and greater premium, if I extract from that buyer a higher and higher price, the odds are Aventually there's a price where that buyer's shareholders are not going to like the deal, and that buyers stock is going to go down. So the equity they're giving me in the M and A deal may go down in value if I extract too much out

of them. So you're always trying to find very similar in pricing of an I p O this equilibrium where I'm getting enough upfront value while being cognizant of the fact that I may be playing a longer term value game and therefore the importance of how that equity trades after announcement is key. So we do have that same struggle and debate very often about upfront premium verse wouldn't it be great if we took this equity and the buyer stock went up so that the premium grows post announcement.

And I do think there's some similar dynamics happening on the M and a deal and your question of when another bidder shows up. What we try extremely hard to do upfront. If we're on the acquisition side with the client and we made the first move, we've publicly announced an acquisition at a price, it's a price we feel

good about. We would have gotten bored approval, the other side would have agreed to it potentially, and someone comes along and offers a higher price, we would have done the work up front to understand how much value were we creating in this deal, how much cushion did we have. Think about that in advance, so you don't get deal fever and you try to chase something that may not be economic. Try to create some ground rules upfront about at this price or above it starts to not make

sense for our shareholders and we should walk away. And if someone wants to pay above that, well, good for them, but that's not in the best inswer for our shares as will let them win. It's like any auction, you have to know in advance what your limited raising you paddle once across is that and what's also happened very interesting in them and a in the last year or two especially, is certainty of getting to closing has become extremely important, almost as much, if not more than just

that upfront purchase price. For example, if I'm on the cell side of a deal and I agreed to a price, and I think it can get to the finish line, meaning through regulatory approval or sharehold approval, and someone else shows up at a higher price, but let's say, for example, they have regulatory risk. Am I willing to forego the lower price that's very certain and take the higher price,

But it has a lot of risk. It's very disruptive, as you know, to announce a deal in twelve or eighteen months later find out it can't close regulatory reasons. And we've seen a few of these exactly a couple of years, and it's been a huge surprise. So part of the dialogue we have with our clients, both on the Cell side and evaluating two bidders that we may be presented with is the certainty of those bids and when we're on the buy side, understanding what we're competing against.

There was an interesting deal a year ago that we had worked on for Dollar Try. We made an acquisition of Family Dollar, and Dollar General came out and put out a higher bid, but it was deemed that on our side, the Dollar Try side, that our bid was more certain we had less regulatory risks, so we stuck with our quote, lower bid, and ultimately the board of the target saw the same thing we saw and ultimately signed up our deal and kept with it, and that

deal did close eventually successfully. So boards have to weigh this tension between certainty of getting to the closing verse up from purchase price, and again we deal with that on both sides. You reference regulatory risk. Everybody on the street has been complaining about changes from Dodd Frank and how regulations have impacted. It sounds like, at least in the examples you're giving, this is really just another factor in the giant calculus calculus of will the deal get done?

What does this mean for this bid and this bidder versus someone else? What's been the impact of these regulatory changes post crisis on I, P, O, S and M and A S. I know that we had some loosening in the Jobs Act, at least in terms of crowdsourcing

and other things. How have the regulatory changes impacted um A, the odds of getting a deal done or an IPO done, and be the desire of people to either go public or stay private quickly on the on the M and A side, Just to continue the theme of the analysis that goes into that is as deep and including many outside experts and lawyers up front. Before you make that announcement, you have done your homework and assessed as best you can,

even though it's imperfect the odds of success. So certainly compared to five plus years ago, companies when they announced a deal today have done much more work with outside experts, evaluating the regulatory risk, what things may need to be divested, if they had to agree to get a deal done, what's the impact. So then we're announcing the deals, they're certainly smarter, but there are still, as we've seen a great deal of uncertainty and risk that goes into it.

And there's then that debate is it worth it is if I'm the seller, is the price high enough for my shareholders that if this unwinds twelve months from now or eighteen months, and the ripple effect, which is only negative of having a failed deal. You know, how can I manage that and how can I plan for that contingency with my employee base to keep them retained and keep them around in case that event happens. All that is much more thoughtfully considered in today's market than certainly

five That's quite fascinating. What are you see on the I p O side? So very you mentioned the Jobs Act, which I think has been a very helpful and productive new regulation that has allowed companies who are considering a U S I p O to be able to test the waters a little bit and get some feedback from investors, which historically had been prevented until a red herring was filed. And by that point, you're putting a price range on the cover, and you right, you're having to make a

lot of decisions without perfect information. And while investors are never going to provide you perfect information, the environment is is definitely more constructive from that perspective, and that is more reflective of actually the global capital markets, is that overseas in Europe and Asia, there's a much more accommodative There historically have been a much more accommodative environment as it related to pre marketing deals, educating investors, and soliciting

feedback around what price the market might bear. So I know I only have you for a finite amount of time. You guys both have busy jobs. So let me jump into some of my favorite standard podcast questions. I asked all my guests, UM, you we talked about your your back educational backgrounds and how they led to the financial services industry. Let's let's talk about mentors who have you each worked with in the past that have mentored your

career along well. I've I've always had wonderful bosses at JP Morgan over the years, and I think there isn't one of us who isn't very inspired by our leader, Jamie Diamond, both as someone to work with and to learn from. That our late vice chairman Jimmy Lee was one of my big mentors and sponsors more recently in my career, and I've also been inspired, i would say mentor, but inspired by other business leaders like a Warren Buffett

for example. Um. And then you know, going back early to growing up, I think my parents mentored me about the value of hard work and the desired who try to get your own seat at the table. That sounds pretty reasonable, Chris, how about you who are mentors in

your career? Very similar echo Lizzes comments. But for me, because I went through a career transition and was effectively a mobility candidate from a computer programming job into a banking job getting my MBA at night while working, I needed to have and luckily did have extremely understanding managers at the time that were willing to invest in me allow me to do that transition, you know, go from point A to point B to point C. So again, early on in my career have always had terrific managers

who kind of were thinking about the long term career path. And at JP Morgan again, I've been surrounded by those folks really throughout my give names who who who moved your career forward. So i'd that first phase when I when I moved from uh, the computer programming job into

an intermediate step that was directly with the bankers. Donald Larson was a was a terrific manager of mine, and she also was getting her m b A at n y U and understood that process and the rigor of balancing your day job while getting her MBA at night. So when we had that discussion and raised it, she was a big fan and supporter of yes, you can do it. Yes, I'll help you do it. I'll give you,

you know, all the support you need. Um. Then, when I transitioned from you know, that part of my career into the M and A group, there were two folks that I always think about when I was again a young associate now finally transferred, you know, as an investment banker sitting in the M and A group, The one that taught me the most about M and A skills and what does it mean to be a world class M and A banker and valus was Jimmy Elliott, who's getting a long time ahead of our head of our

group now retired, but his rigor around the analytics and the skill set and almost the science part of the job, as well as being able to express a point of view in a clear kind of bold way, you know,

those things are always kind of resonate with me. And then the first client banker I ever worked with, Henry harnisch Feger, who's still at JP Morgan today covering our our metals business and clients globally, taught me everything, how to be a great client executive and a salesperson, how to how to deliver and create great advice to a CEO or a board, how to build rapport, how to create that chemistry naturally, and just watching him from a

young age, just very naturally build trust with a client you know, and how to establish world class relationships. You know, still sticks with me today and Chris and I still have the same boss, Carlos Hernandez, who runs our global investment banking franchise, who's had a background both in markets and on the advisory side, and it is great fun to work with and has mentored many of us for years,

and he has a style as imagined. Liz and I are part of Carlos's management team and really has brought you know, the hallmarker JP morgan is and culture and conduct and teamwork and partnership and the ability of all of us to sit around a table, share ideas, best practices, work together as one cohesive team under his leadership has been really phenomenal last couple of years. But Liz, you mentioned one Buffett any other investors stand out as as

having influenced the way you think about underwriting. I P. O. S and and other things. Well, I think of my mentorship by investors is is really fluid and organic. I'm meeting with different investors across the globe every week, and it's interesting to see their perspectives as they manage through

sometimes turbulent times. So I wouldn't I wouldn't want to favor any one or the other, but it's it's it's so critically important for me to be able to be in close touch with that community and seeing really the struggles and the successes that they have, learning why they

have more cash in reserve at a particular time. I'm and thinking about what deals really made money for them, what deals did they find very challenged um and just finding better ways to deliver good quality product to that community. And let's talk about books. This seems to be the section that segment that everybody is so enthralled with. What are some of your favorite books, be they fiction or nonfiction,

investing related or or rodorant general interest. Well, I don't know if these are my favorite books, but I can tell you what I'm reading right now. So I've been interested lately in just thinking about a little bit in the neuroscience topic. So have two books going that sort of loosely relate to that. One is actually written by

a neuroscientist, UM Francis Jensen, about the teenage brain. So I have kids that are growing up and thinking about how do their thought processes evolve as they mature as human beings, And there's a lot more to learn about that today, um than there used to be. Is that? Is that what that's called teenage the teenage brain, the teenage brain, and and there's a long subtitle to it,

but it's been interesting to read. And then am I correct in saying My wife is a teacher and says they're not done cooking yet, Not not at eighteen, not at college. I think it's something like twenty three or twenty five. The brain is still evolving, It's for sure at eighteen it's not done. So I would say that it's it sounds like they're even some data that would indicate even up to the age of thirty there will

be still changes that are evolving. And also that the brain changes with life experiences, which I hadn't reflected on a lot previously. And then I'm just reading a book called The Art of Critical Thinking, UM, which is really about refining your decision making and thinking about how not to fall into the traps of human nature. Who's the

author of that, Ralph de Belly, Ralph de Belly. And then for fun, I'm reading a crime novel by Peter Spiegelman called Doctor Knox that I'm just starting to get into. How about you, Chris Giving some books, say some some of my favorite readings were from Malcolm Cladwell. His approach to the analytical party appeals maybe my engineering background or analytical thinking, but the way he looks at a situation and then analyze it either an Outliers or David Goliath

or Blink of these other books. I've always enjoyed that style of thinking of a topic and then attacking it from a couple of different areas, different stories. So again, he's one I generally keep an eye out when something new comes out from him or some of his talks that he's done listen to. I I it's okay. I say. My wife's a young adult teen author, so I read a lot of her work, and she's got her second

novels coming out in about two weeks. So I enjoyed reading her work as is progressing, and then once it's finally ready to go and publish. So she's got a book. Um uh Sky Pony Press the publisher. It's Black Flowers, White Lies that's coming out now, and that's that's been a real fun part, uh to be part of that support network with her and be her biggest fan. And we have two teenagers, so they're her toughest critics. So once it passed my son and my daughter's test, she

knows it's it's ready for prime time out there. So again that's where I spend most of my time, you know, reading Who knew Chris was a book editor on the weekends. You go. Um, So let's talk a little bit about what's changed since you joined the industry. What what have you seen over the arc of twenty plus years that's significantly different today than than when you began your careers.

I'd say one thing on our front and the equity capital markets is that I p O and other equity road shows are substantially shorter, So we get a lot more deals done for clients in any given year. Shorter in terms of start to finish your shorter in terms of when the announcement is made to the point where you actually complete the road show. Is it the actual

event itself or the whole process. We're both. I was thinking specifically about how many days a management team needs to spend on the road, and these are extremely grueling processes where they are out pitching investors repeatedly, multiple times a day, with little breaks, and we try to make

sure they at least get to eat um. So if you think about an I p O. When I first started in equity capital markets in the late nineties, we were regularly on the road for three weeks, two to three weeks, three weeks if it was a global deal, and now many of our deals that are let's say US centric in their approach, would be as little as

seven days. How much of that is due to technology that you don't physically have to be in the room, right, So a lot, And I would say technology is probably the other theme that's changed, And the related theme that's changed our business is our ability to reach more investors is just substantially greater, and I think it's just better and fairer that more people have access to information, and that's definitely helped ease the burden on management teams as well,

because we don't want to take them away from their day jobs for too long because that's bad for the company. So UM, and it's also having shorter road shows. You think of a traditional follow on. Back in the late nineties, we would have marketed for five days, let's say, so public company raising additional equity. So there they were out there for five days of market exposure, and we could never predict exactly what the market was going to do or what their stock price was going to do while

we were out there. So now UM, in some certain certain circumstances, we can price a deal overnight, so announce that the close of the US market and price it sometimes that night or certainly by the time the market

opens the next morning. That's substantially different than the old substantially different, and there's some in between obviously today as well, Chris, do you see is M and A the same thing, or is the process you're selling a company or buying a company is the same as it was twenty years ago. There's a certain element that is the same when you're when you're selling a company, it takes time to prepare, to think about the materials, contacting buyers, getting them the

sign confidentiality agreements. That that part of the process looks and feels very similar in ten or twenty years ago. What's very different is just the speed of information flow, the ability to work remotely. Very often we have to develop these valuation models, or suddenly someone sends in a letter with a price in it, and in the older days, it may take a week or so to analyze that and value the company and think about who the other person is. And now effectively seven remotely you can log

in get that information. Valuation could be updated very quickly. It's much more real time. Where if we get, for example, a hostile offer bid comes in, so an unsolicited bid where that company we've received it, we're working with that target company, we very quickly can get on the phone with the board, usually within twenty four hours, and be very thoughtful, here's the value of that bid, here's who

the bid or is. Here's the value of our own company, Here's how it compares, and do all that analytical work extremely fast, again remotely wherever that happens, whenever, time of day, boom, we're on it. You know, five seconds later we're working because we know what that product needs to look like to give the board the best advice and the best input.

So I think access to information, speed of information, quality of information, the ability to work remotely around the globe seven has just made our business fast and more thoughtful, and the types of discussions we have are just based on deeper amounts of analysis and information in a much short time series. So the thought of bankers working nights and weekends in the city in the summer when just picture of August weekend and the city is empty, is

that not as true as it once was. You can log in from a laptop in the Hampton's and not have to be in Manhattan, or is it all hands on deck? There's certainly in the M and A business there's a greater and greater ability for the analytical work to be done remotely, but there's still no substitute, and there is still no substitute for just sitting across face to face with your client talking through the issues, or in front of their board in the boardroom, face to face.

So there is still the importance of having that human interaction together talking through the issues, but the preparation for that, generally the valuation work, the analytics the analysis could have up and remotely do not need to be sitting at an office or a cubicle. The technology we have and our our teams have access to is terrific for them to do that in real time and very seamlessly. So so let's extrapolate all this forward. Those are the changes

that took place. What are the next shifts that are going to happen? Well, I think we continue to think about how to leverage technology so that we can get more done. Right so that if I can work on an I p O or a big equity raise while I'm traveling the world, that means we can get more done in a day. So I think that theme will

continue as we go into future years. But we're also thinking about ways that we can leverage technology, things like artificial intelligence, and ways that we can use technology to analyze and be predictive around deals um and to help clients think about extrapolating um what might happen for them.

So there are it's almost it almost could be a full time job just thinking about how we could leverage technology to help issue our clients, or get more done on our side, or be more um thoughtful and creative around future situations that might happen. But but tech is the big change that that's been driving things in the past, and it sounds like it's going to continue to drive

things in the future. I would agree, Chris. I do think there's there's an element of big data or analytics that could be very helpful, and it is becoming more

helpful for our business in terms of targeting. You know, we have a finite number of bankers or resources and a much larger list of potential clients, and the ability to to think about and analyze who may need our help the most, who may be vulnerable to a sher old activists showing up in their stock, who may be vulnerable to a hostile takeover, who looks like they're struggling on a competitive basis, and where maybe a division or

or an acquisition or divestit or may make sense. And given the vast amount of information out there, to have thoughtful people combed through that data, uh using technology and surface up a list of priority clients, really prospects or potential clients folks we may not have a relationship with, or if we do have a relationship with them, to flag that Hey, if you haven't had a conversation on this topic, you know, our our screening methods say you should.

And that's great in terms of ensuring everything we're working on and everything our teams working on is of its highest and best use. So high quality, high yield, meaning in terms of where we're spending our hours, they're valuable hours our clients want us to be talking to about that topic. So a more predictive element to the business.

I think we're feeling that happening today and I think it will continue for So I asked the same eight or nine questions to everybody each week, and one day a reader's a listener sent an email and said, you know, I'd love to find out from your guests what they do outside of the office to relax, what they do to keep mentally sharp, and how do they stay physically fit. I thought that was that. That's the short version. The preface was, Hey, all these folks have really stressful jobs,

really demanding jobs. How do they how do they wind down? How do they relax? So let me ask you both. This will be the first time this question has worked its way into the regular podcast questions. So, so, what do you do to kick back on the weekends when you're not in the middle of an underwriting or an acquisition. I guess a couple of topics. Again with with kids, my weekends generally have been great to to help them and watch them with sports and just play around the

backyard or go their games. So that certainly has been a fun time to spend, you know, outside of work, focused on them and interacting with them. I played football at high school at college and always enjoyed weight lifting and trading, and every now and then my basement will have me pop into it and and and do a little bit of that as well. Again just as a good way to half hour an hour just go down

there and sercize in in that format. I am not a very good golfer, but I love to play so well I may not be able to get out there and play a full round of golf, I'll go to the driving range for an hour and just you know, there's nothing like trying to hit that little white ball to make sure you can't think about anything else. Um.

So I find that therapeutic at times. So those are a few things that I do just uh, spend some time about you, Liz, when you're not chasing um your kids around as well, right, I think, similarly similarly to Chris, being with my family is the great reward. And I have a fantastic husband and two incredible children who keep

me very active on the weekends as well. And now everybody's old enough that we can actually play a few rounds of golf together, play doubles tennis, which is a little erratic but really fun, and so that's that's been great. And having that time, I think really helps me put things in perspective and and hopefully I do that for my husband, two's in the financial world, has a crazy

intense job as well. Um. And then I think on the exercise front, I love yoga and pilates and starting to learn more about out or starting just scratching the service of learning more about meditation, and just thinking about I've just been inspired hearing about how so many successful business people have used it to hone their own performance. Both both interesting uh answers. Let let me go to my favorite two questions. Um, this comes up a lot

from from listeners. So a millennial or recent college graduate comes up to you and and says they're thinking about a career in finance. What sort of advice would you

give them? Well, I think, firstly, be prepared to work hard right anything that you want to be successful in you need to work hard and commit to and I think as we talk a lot about millennials and the different perspectives that evolves as each generation comes through the ranks, and I certainly think one bit of advice would be to not forget about the value of consistency in your job and end the and the ability to develop subject matter expertise that doesn't come necessarily from jumping to a

new job every two years, even if your friends are doing that and you feel like you might be missing something is to buckle down and get really good at what you're learning. And my limits test was always, when I go to work every day, am I happy to be going and am I learning and growing as a professional and as a person. And if the answers were yes, keep at it. And that strategy has worked really well

for me. And so that's why we continue to think about ways to make sure that our junior employees are getting the experiences and also some of the other broader benefits of working for a large organization that they're seeing that very clearly every day and getting that opportunity to really advance themselves through multiple years working with JP Morgan and I know Chris and I really enjoy so training that next junior banker coming up the ranks. How about you, Chris,

what what? What sort of advice would you give a millennial? Very similar? Once you're you're inner job, and maybe if you can do with some internship or talk to folks to understand it before you get in it. But let's assume you've decided this is the job I want and I'm in that. Just master that job before you start to look up at the next one and the next one and the next one. It's almost a similar way of saying what what Liz was just saying in terms of invest in being great at the task at hand.

So what is your job description? What are people expecting of you? Master that quicker, faster, smarter um then lift your head up and look at what the people more senior than you were doing and saying, hey, how can I how can I help you? How can I take some things off of your plate? How can I expand

my responsibilities? Where I've seen people fail is they start doing the second part before they've mastered the first part, so they're already looking at the next job, the next you know, path in their career, and they haven't quite mastered the first part, and they're disappointing the people that are directly relying on them because they're off thinking of step three and four and they haven't really finished step one or two yet. And that basic advice, I do

think goes a long way. It's very consistent about just just focus on what you're doing, do that really well, then lift your head up and go on to the next thing and the next thing. Um And I always have this kind of three criteria when I'm when I'm talking to someone. I used this myself throughout my career. Are you learning new skills? So? Are you in a job where you're just developing your own talent these skills?

And are they marketable skills? Are they reusable? Can you use it within your job and beyond or even beyond the current job so you never feel trapped? So you're learning new skills? Can you check that box yes or no? Do you like the people you're working with? Do we enjoy going to work? Do you enjoy the team you're part of? And then the third are you at a firm you're proud of? You know? Are they heading in

the right directory? Do you like telling your friends or family where you work, and and just if you're able to check those three boxes and then ask yourself that everyone has a different frequency of this, But every three months or every six months, go back and I learning new skills. Do I like the people I'm with? Do

I do? I feel proud about the company? And for me, I've done that throughout my whole career JP Morrigan and have consistently been able to check those through box internal self review exactly and be honest about it with yourself and and to extent you're you're not checking all those boxes, I think it's you know, then you think hard about it, but again, you know, Luckily, for for me, I've been

able to check those boxes. I think that third one about the firm is sometimes outside of your control and you maybe get a little lucky. You know. When I joined, you know, I didn't know JP Morgan would evolve and continue to be, you know as it seems. So it seems the company you work for. You have to not only work for a good company with a good culture.

You have to hope that you get a little lucky, and things don't this week especially, I won't mention any names, but there has been some folks testifying in Congress and from a variety of fields, not just finance, and they all um seem to have tripped themselves up a little bit. And if if you're a junior guy in a in a big company that's wholly out of out of your control, it never hurts to get a little lucky, does it.

So my final question with with that little uh digression, you know, we don't have the TV on in the office, but every time I'm here, there are screens everywhere, and it seems the past few times I've been in the Bloomberg building, it's been congressional testimony all day long. So you just say, gee, I hope I never have to deal with that. That looks like that's no no fun. Um. So our final question, and and one of my favorite, what is it that you know about your field? About underwriting?

An I p O is about mergers and acquisitions today? What is it that you know today that you wish you knew twenty plus years ago when you began let's start with you list, I'd say that everything you do when you work at a big company like JP Morgan can actually shape the market. And I think I didn't really appreciate that early on in my career that some of the things that we were doing back then is we were building our equity capital markets franchise. Way back

when is we were defining the market. And so that's a really exciting thing to think about. And sometimes I have to remind our group, is these deals that you're working on, they are shaping what's going on in the financial world. That's why they're on the cover of the newspaper and being discussed on Bloomberg on TV. So it's um, we're an incredibly Chris and I and our colleagues are an incredibly privileged position to be able to use our

skills too. We believe make change for the better in terms of whether it's getting companies money, you're helping them progress in their growth trajectory and defining what makes sense in terms of connecting buyers and sellers, and and really contributing to that market environment. Chris, what is it you wish you knew twenty years ago about M and A

that you know today. That's something that I've kind of felt evolve over my career as you realize how small the world really is, and certainly when you work at at a global company like JP Morgan, and you're involved

in global deals. The people you're interacting with, even at a very young point in your career out of out of school, the treasurer assistant at the company, the junior lawyer at the law firm, a junior analyst at a public relations firm, when you're working with them on a deal, you're kind of growing up with them in the business.

And many of my closest clients today were people who were just as junior as me many years ago that I've moved up the organization, and it's just as always a great reminder that everyone you meet, you know, treat with respect, treat in the proper way, you know, do the right thing, because it always comes back and and and it's a real career booster, you know, as you grow up in your business, you know, so that I have many examples where the business development person at a

client or the CFO over time becomes the CEO or critical board member, and having that history and positive relationship, you know, it really does help our strategic dialogue and trust in the types of relationship we're building. So again, that's been a good lesson I've watched happen over my career and just I always share that with others as they think about their early days in their career, to make sure everyone they interact with matters for the long term.

And the corollary to that is your friends can become your clients. That's quite interesting. We have been speaking with Chris van Tresca. He is the global co head of Mergers and Acquisitions at JP Morgan and Elizabeth Myers, head of Global Equity Capital Markets, also at JP Morgan. If you enjoy this conversation, be sure and look up an inch short down an inch on iTunes and you could see the other hundred and eight or so of these

conversations we have had. I would be remiss if I did not thank Taylor Riggs, my booker, Michael Batnick for helping out on research and is it still Charlie in the booth, Charlie Valmer, our recording engineer. I'm Barry Hults. You've been listening to Masters in Business on Bloomberg Radio, brought to you by Bank of America Mary Lynn. Seeing what others have seen, but uncovering what others may not. Global Research that helps you harness disruption. Voted top global

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