Sideways: The Jamie Dimon ex-deputies club

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By:
Jon Macaskill
Published on:

If JPMorgan CFO Marianne Lake becomes the banker most likely to succeed Jamie Dimon as chief executive before mysteriously deciding to pursue interests outside the group, she will be in good company.

sideways

Two of the three most recent holders of this title are now chief executives of big banks, while the third may be plotting a return to a high-profile position from the shadows of a private equity partnership.

Bill Winters, the former co-head of investment banking at JPMorgan, was with the firm well before Dimon was installed as chief executive; the two had an uneasy relationship. Although Winters is American, he insisted on remaining based in London and appears to have tried to make any move to New York conditional on a commitment that he would succeed Dimon. 

If that was really his gambit (full details never emerged), then it failed and he left the bank in 2009, despite being widely viewed as the investment bank chief who had handled the 2008 credit crisis most adroitly.

Heirs apparent

Winters was succeeded by Jes Staley, who inherited JPMorgan’s investment bank along with the honorific of potential heir to Dimon.

Staley’s departure came soon after the London Whale credit derivatives trading disaster in 2012 that cost JPMorgan $6.2 billion. As with the exit of Winters, there was no obvious business reason to force Staley from his position. The London Whale default swap positions were put on by a JPMorgan investment office that was set up separately from the main credit derivatives trading activity of the investment bank. 

Speculation that traders from the investment bank helped to disseminate news of the massive exposure was rife among rival dealers, but there was no evidence of this, and the managers with direct responsibility for credit trading have since prospered at the firm. 

So Staley may have suffered the same fate as Winters and been punished in part for seeming too high profile in a bank that only has a spotlight for one supremo at a time.

Winters and Staley both followed a similar post-JPMorgan route to the top at another bank. Winters set up a hedge fund called Renshaw Bay while Staley briefly joined Blue Mountain, a hedge fund that profited from the London Whale debacle, first by trading against JPMorgan, then by helping it to restructure positions.

Life after JPMorgan

Neither man was expected to remain in fund management and Winters agreed to become chief executive of Standard Chartered in 2015, shortly before the appointment of Staley as chief executive of Barclays – a role that many thought would have been a better fit for Winters.

Marianne_Lake-160x186

Marianne Lake,
JPMorgan

A more recent potential heir to Dimon at JPMorgan was Matt Zames. His emergence in this precarious role was surprising. Winters and Staley were both veteran investment bankers with widespread support among their subordinates and strong relationships with key clients.

Zames, a former interest rate swap trader, was unpopular with many of his colleagues, even in the dealing room environment, where an abrasive attitude is taken for granted.

His emergence as chief operating officer and potential chief executive at JPMorgan puzzled co-workers and outsiders alike, and was generally attributed to an ability to please a single client: Dimon.

Eventually this relationship seems to have soured, and Zames resigned last year. In April this year, he re-emerged as president of private equity firm Cerberus Capital. His remit includes overseeing all financial services investments for the firm, which raises the intriguing possibility that Zames is plotting the equivalent of a reverse takeover that would place him alongside Winters and Staley as the chief executive of a big bank.

Cerberus is a large shareholder in Deutsche Bank and was recently appointed as an adviser on its restructuring – a highly unusual position for an investor.

Deutsche is likely to give recently appointed chief executive Christian Sewing a chance to turn the firm around, but if anything changes then Zames will surely be among the first to know and might just join the ranks of former Dimon deputies running a big bank.