| JP Morgan is here to stay |
Back |
| With growth in the European structured finance industry expected to be in the range of between 15-20 per cent over the next five years, and Dublin increasing in prominence as a securitisation centre, JP Morgan Institutional Trust Services expects to leverage on this, and continue to increase its market share and boost employment to 70 by 2005. |
J.P. Morgan Bank (Ireland) plc can trace its Irish roots back to the early years of the twentieth century. The National Land Bank, established in 1919, stands at the head of a family tree of Irish institutions which, through a long history of activity culminating in the Chemical Banking Company/Chase Manhattan Bank merger (1996), and Chase’s acquisiition of J.P. Morgan (2000), has borne fruit in the offices of JPMorgan House - now home to some 220 staff.
These staff are engaged in three lines of business, namely Investor Services, which provide securities processing and fund administration products; Treasury Services whose products include liquidity and treasury administration services; and Institutional Trust Services (ITS) which provide transaction management and administrative services for conventional debt, structured finance, global securities clearance, collateral management, and American Depository Receipts (ADRs).
For its institutional trust business in particular, JPMorgan’s rapidly expanding presence testifies both to the bank’s expertise in the field of structured finance services, and to its commitment to building and maintaining a substantial Dublin-based footprint. Joe Duffy, vice president, Institutional Trust Services, joined JPMorgan at the end of June, and since then, he’s expanded the ITS team in Dublin by almost 50 per cent, to 32 people. This growth further complements ITS’ European franchise of over 400 people.
‘ITS’ operation in Dublin isn’t just an administrative one,’ he says. ‘It’s a ‘hearts and minds’ operation.’ This is borne out by the breadth and depth of the team, which encompasses functions such as product management, analytics, administration and listing agent services, and the Irish business is supported by a dedicated team of sales people, who are based in London. The sales team are responsible for selling ITS’ services across Europe. Nicola Dale, vice president, covers Ireland as a market in its own right.
‘Historically, ITS-Dublin was largely an admin business,’ says Duffy. ‘Now we’re moving quickly towards a complete business model, with the scale and critical mass that it requires. And our commitment to growth means we also create more work for shared services, infrastructure-focused functions in the Dublin office... specialists in IT, HR, admin, and so on.’
As head of the ITS-Dublin business group, Duffy is a member of JPMorgan’s European Global Debt management team. ‘The views and input of the team in Ireland are as important as those of any other European group,’ he asserts. ‘Just because we’re in Ireland doesn’t mean we’re run any differently.’ The operations in London and Dublin share common control systems, system platforms, training standards, business tools and reporting requirements. Dealing with Dublin is thus identical to dealing with London.
This is perhaps all the more important, in the wake of the events of September 11, 2001. US institutions have been particularly anxious to put in place comprehensive business back-up and continuity models. The Irish operation now shares full commonality with JPMorgan’s London business, which it complements in every detail.
JPMorgan’s involvement in the securitisation industry in Ireland first flourished in the wake of the Chemical/Chase merger.
In recent years, the Dublin team has developed special skills - and a reputation to match - in the administration of conduits, synthetic CDOs, and market value, cash flow and arbitrage CDOs.
One of the team’s higher-profile transactions was the synthetic CDO sponsored and managed by Robeco Asset Management, based in Rotterdam. This was the first stand-alone, multiple dealer-managed synthetic CDO in Europe. A key innovation was the management of credit default swaps under a dynamically-managed reference portfolio. Since Robeco CSO III B.V. closed in December 2001, other European collateral managers have adopted similar structures. Robeco repeated its success with CSO IV, VI and VII - all of which brought repeat mandates for the Dublin team.
Repeat business like this is an eloquent endorsement of the team’s skills, while the diversity of their backgrounds testifies to the Dublin office’s ‘pulling power’. They’re a cosmopolitan lot, including among their ranks an Australian analytics expert, Spanish and Argentine experts in synthetic CDOs, as well as Irish personnel from both sides of the border.
‘The Irish workforce is one of the best-educated in Europe. In terms of the skill sets available, Dublin can compete with the biggest financial centres, and offers attractive value,’ says Duffy. Given the relative youth of the securitisation industry in Ireland generally, people with experience of the business under their belts are fairly scarce, but their numbers are growing all the time. This growth is further supported by ITS’ ability to leverage off the expertise already firmly established in its London base. The bank’s training and development efforts are able to generate valuable returns for its entire European franchise. Moreover, Duffy believes that JPMorgan’s unique breadth of service makes it particularly attractive to potential new recruits; they have a chance to gain knowledge and experience they wouldn’t necessarily find elsewhere, and are more likely to stay with the firm longer as a result.
Duffy has recently extended the team’s offer by recruiting an ISE listing specialist. ‘We don’t intend to compete with the established listing agencies; that’s not the point. We don’t see ISE listing as a product in its own right. But now we’ll be able to capture the listing element of a transaction, providing a service that’s fully complementary to the rest of our offer.’
So what does the future hold?
The forecasts point to underlying growth in the European structured finance industry of 15-20 per cent over the next five years. JPMorgan enjoys a leading market position in this industry segment, and Dublin’s role within the broader European business is now well established. Consequently, Duffy expects significant growth. His specialist team already provides services for increasingly complex transaction structures in a dynamic market place.
‘From the second half of 2002 into the first half of this year, the ‘hot’ product was synthetic CDOs. We were able to move quickly, leverage our expertise and meet the market demand. If another hot product emerges, I’m confident that with the skills we have, we’re well placed to do it again.’
Joe Duffy’s optimism is reflected in his plans for the Dublin team, which he aims to expand to 70 people by the end of 2005. And as it grows, Duffy is confident that it will increase its market share. JPMorgan is here to stay. |
|
|
