JPMorgan’s Melissa Smith on Middle Market Banking

Barry speaks with Melissa Smith. She is co-Head of Commercial Banking at JPMorgan. Previously she was Co-Head of Innovation Economy and Head of Specialized Industries. Melissa has been with JPMorgan for over 20 years. She works with founders, CEOs and CFOs, delivering a cohesive banking experience to startups and fast-growing companies. On this episode, Barry and Melissa discuss her path through finance and dance, the complexities of middle market banking, and how J. P Morgan is preparing for the next wave of technological disruption. See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:31Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs, and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 1:13Speaker 01

  and hiring practices, but according to recruiters, advisors and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.

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• 2:04Speaker 02

  This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

• 2:10Barry Ritholtz?

  This week on the podcast, I have yet another extra special guest. Melissa Smith is co-head of Commercial Banking for JP Morgan. Previously, she was co-head of the bank's Innovation Economy Group. Really fascinating because she sees the world from a very unique perch, has incredible access to every aspect of both commercial and investing banking that a small startup or medium-sized company, and by medium, I mean up to $2 billion in revenue, might need. And that gives her this really incredible set of insights into how these companies are

• 2:53Barry Ritholtz?

  growing, what they need, what direction various industries are moving in. It's really kind of fascinating because if you remember back 20, 25 years ago, Wall Street and the large investment banks and brokers were kind of accused of moving up market and abandoning that whole middle section and allowing private equity to get a toehold there. To their credit, JP Morgan has aggressively moved back into what some people used to call, you know, middle merchant banking or middle-market banking. And I thought this conversation is just a whole world that you don't know exists and is in fact robust and growing rapidly.

• 3:36Barry Ritholtz?

  I thought, I thought this was a fascinating conversation, and I think you will also. With no further ado, my conversation with JP Morgan's Melissa Smith.

• 3:46Speaker 04

  Thank you so much for having me. It's a pleasure to be here.

• 3:48Barry Ritholtz?

  Well, thank you for being here. Let's talk a little bit about your background before we work up to JP Morgan. Bachelors in Political Science from American University and then you get a Masters in Public Policy from University of Chicago, not the traditional path for people in finance. What was the original plan?

• 4:07Speaker 04

  So, I definitely thought that I was going to work in the public sector. When I'm recruiting at JP Morgan, I always get the question, sort of, how did you get into investment banking? And I would love to tell people I had a grand plan. I didn't really have a grand plan. But my policy degree was at University of Chicago, so it was very heavy econ and stats and basically the same core curriculum as the business school. And in my summer in between, I worked for Mayor Daley in Chicago on economic development issues. And as I was doing that, I sort of decided it would be even more interesting to come to the public sector at a more senior level. And I also wanted to make sure that I was going somewhere that would really leverage the quantitative skills that I was acquiring at Chicago.

• 4:51Speaker 04

  And I also thought it'd be a really good idea to be able to pay off my undergrad and grad school loans.

• 4:54Barry Ritholtz?

  So, that makes a lot of sense. But before you got your Masters in Public Policy, you have a little bit of a different professional experience. You began ballet at age four and danced professionally for how many years?

• 5:10Speaker 04

  For three years.

• 5:12Barry Ritholtz?

  Tell us about that. That is not the usual path to Wall Street.

• 5:16Speaker 04

  Definitely not. So, yes, I started taking ballet at a very early age. That was my original career aspirations. Starting in seventh grade, my poor mother drove me 120 miles round trip every day to Washington DC to go to ballet, where I was from, sort of left school early at noon, kind of got home at nine or 10 at night, every night. And so, quite frankly, my parents were sick of driving me. So, I graduated from high school a year early in order to dance and sort of continue my dance training and then dance professionally before I went to college. And my, again, my aspiration was to just continue dancing professionally. As you may or may not be aware, you know, very few people obviously sort of make it

• 5:58Speaker 04

  in that world. Point 000001% are ever going to be in ABT, which is sort of the pinnacle in the US.

• 6:03Barry Ritholtz?

  Right.

• 6:04Speaker 04

  American Ballet Theater. And so while I was, you know, good enough to be in a small company, I was not going to be in ABT and I didn't want to totally give up my education. And so that's why I stopped.

• 6:12Barry Ritholtz?

  I know people who were pretty far along that same process. And as they've gotten older, they talk about, like, they sound like old football players talking about injuries. Their ankles, their toes, their calves, their knees. I'm like, wait, no, no, you guys are just dancing. And they laugh when you say that. What was your experience like with that?

• 6:32Speaker 04

  I mean, it was an amazing experience in that it teaches you such a huge amount of discipline and, you know, takes determination, perseverance and kind of grit. You know, just back to there's very few people who sort of make it. You are in a sort of a siloed world because all you do every day is dance is kind of how I would describe it. And I would also say, you know, I can have this debate with people all day long. I think there is no greater form of athlete than a dancer. To your point, they are, it is grueling on one's body and...

• 7:04Barry Ritholtz?

  Really, really physical.

• 7:05Speaker 04

  Really, really physical. In any way than any other athletics are with the added sort of thing on top, which is the whole point of ballet is to make it look effortless. There's no like grunting down the basketball court or the football court, right? So it takes the same amount of strength, but you add the control of your body on top of that to make it look effortless. And that's why, you know, sort of the athleticism is very unique. But it was, it was an incredible experience and I felt very lucky at a young age to have something that I was so passionate about. Not everybody sort of has that in their lives at an early age.

• 7:37Barry Ritholtz?

  And your comment about perseverance and grit, those are personality characteristics. I don't know even know whether to call them skills or not, but that will help you no matter what you do.

• 7:49Speaker 04

  Absolutely, absolutely.

• 7:50Barry Ritholtz?

  So ballet to college to grad school, how did you stumble into JP Morgan?

• 7:57Speaker 04

  So again, did not have a grand plan. At the time that I was in policy school at Chicago, JP Morgan's public finance team recruited specifically at the policy school, just back to, it was this, you know, very kind of quantitatively based. And so, kind of randomly went to the interview, to be quite honest, and was, you know, did well, was offered a role, sort of back to, back to my earlier point, kind of thought it was good to get some private sector credibility on my resume, learned something new. And I think probably as anybody coming out of either undergrad or grad school thinks, you know, oh, I'll go do this for five years and sort of see, see where that leads me. And lo and behold, you know, I've been at JP Morgan, to your point, you know, 20 plus years now.

• 8:36Barry Ritholtz?

  That's amazing. So you start as an associate, you're focused on debt?

• 8:40Speaker 04

  Yes.

• 8:40Barry Ritholtz?

  Was there an interest in debt? Was that just related to public policy?

• 8:44Speaker 04

  So I started in public finance, which is back to, that's why they were recruiting in the policy, so taxes and bonds for municipalities. I did that for about a year and a half, two years, and then I moved into debt capital markets for corporates, so kind of, you know, easy transition, taxes and bonds to corporate bonds. And then I spent, you know, the majority of my earlier career, the first 16 years of my career, in the investment bank in debt capital markets.

• 9:06Barry Ritholtz?

  And just for the youngsters listening, 25 or so years ago, high-rated municipal tax-free bonds were yielding 5%, 6%, maybe more?

• 9:17Speaker 04

  Maybe more, yeah.

• 9:18Barry Ritholtz?

  Just, those were the, before we start, where I guess we were only halfway through our 40-year rate cutting cycle, you could get tax-free yield at 7%, imagine, and A-rated, not junk. Imagine what that was like.

• 9:33Speaker 04

  Totally.

• 9:33Barry Ritholtz?

  All right, so, so you go from public finance, how did you evolve towards co-head of innovation economy?

• 9:41Speaker 04

  So was in DC, debt capital markets, I like to say I grew up in debt capital markets, which as an aside, I think that was such a great experience, because, you know, in DCM, you're sitting on the trading floor, right? I loved being in that environment, because I think it fosters learning so much more quickly. I literally sat next to the, the managing director that I worked for, and was listening on all the client calls, and sort of, you understand much more quickly how to handle specific situations. I also, it was sort of an interesting dynamic where you're on the private side, on the origination side, talking to corporate clients and advising them about their next debt raise or their funding needs. But you have to spend a lot of time with the traders who are trading the bonds in the public markets, and they're obviously on the public side. So you're sort of walled off, right?

• 10:26Speaker 04

  But then you'd have to go over on to talk to the traders. And sometimes you'd walk over there and you need information from them, but they can't give you any information. And so you'd walk over there and sometimes they sort of look at you because they're busy. And you sort of get this feeling, you know, get out of my face. What do you want? So I think it was an interesting experience because you have to kind of, you know, gain some credibility with them and, you know, ask insightful questions, show that you have some sort of use. So I thought it was a great way to kind of like grow up and learn about the business. But again, was in DCM for 16 years, including three years that I was in London, running our European debt capital markets business.

• 11:04Barry Ritholtz?

  I got a lot of questions for you about Europe, but we'll circle back to that later. I'm looking at my own handwriting, 22 or 27 years? Is that 27 years you've been there?

• 11:14Speaker 04

  I think it's 26.

• 11:15Barry Ritholtz?

  So going on 27.

• 11:16Speaker 04

  Going on 27. Now I feel old.

• 11:18Barry Ritholtz?

  So it's not, well, what's more fascinating is, and you started when you were, you know, 17, so it's not a big deal. But, you know, that's relatively rare these days to be at any one firm for a quarter-plus century. What is so special at JP Morgan? What's kept you there for so long?

• 11:38Speaker 04

  Sure. So first, I would say, you will actually find many senior people at JP Morgan who have been there for 20 years plus, and I think that is obviously a great testament to the culture that we have at the firm. Secondly, I would say JP Morgan is a large place, clearly. And what that means is there are multiple lines of business with many different things that you can do over the course of your career. And generally speaking, we are sort of number one or number two in everything that we do, which again is a great privilege to work there from that perspective. So it doesn't make a lot of sense to go necessarily to another firm when you're sort of trading down, if you will, in some instances. Maybe I shouldn't say it that way. And so I think what's kept me there is, you know, A, just The opportunity to do many different things, learn about many other aspects of the business.

• 12:21Speaker 04

  And two, you know, obviously, you know, very much appreciate kind of the culture and environment at JP Morgan. Kind of back to that's why people stay there for so long. It's a very teamwork oriented environment. You know, we like to quote JP Morgan, first class business in a first class way. We take that very seriously and just appreciated that about the environment.

• 12:39Barry Ritholtz?

  So let's talk about your dual role, your co head of innovation economy and your head of specialized industries. Tell us what each of those roles encompass.

• 12:50Speaker 04

  Sure. So our specialized industries business sits within our middle market business. And just to define that middle market sort of means in the commercial banking, right? So anything from kind of a very early stage startup to a company that's up to $2 billion in top line revenue. So kind of a very wide, wide remit, if you will. About half of that business is the industry business that I run. So I have 19 different industry teams. So bankers that are experts in those specific industries to provide obviously coverage to clients in those industries. And I would just say, I mean, we are just a big believer in the, the, you know, better coverage and better, that we can much better serve a client when our bankers have that expertise in terms of the industry.

• 13:32Speaker 04

  So we're kind of very big believers in industry expertise and kind of hyper segmentation in terms of covering companies at different stages and sizes in their lifecycle. So 19 different industries, innovation economy is basically a part of that. And we use that innovation economy kind of umbrella term to describe tech, early stage tech, life sciences, health tech, climate tech businesses, which are generally speaking, high growth VC backed businesses overall.

• 13:56Barry Ritholtz?

  Well, let's talk a little bit about that. I'm familiar with a lot of the companies that VCs tend to back. But one of the things that we've been noticing very obviously over the past few years is the amount of not venture income, but either private equity or private debt.

• 14:16Barry Ritholtz?

  How does that play out in the companies you're servicing?

• 14:20Speaker 04

  Absolutely. Two really important trends. So I would say, so within the innovation economy, to your point, a lot of the companies tend to be VC-backed, but there definitely is growing, growing sort of crossover into, into growth equity funds. I think in the middle market commercial banking business as a whole, there has been a ton of activity from the financial sponsor community. So a ton of consolidation of those middle market businesses. And when you just look at sort of the levels of activity, like what are sponsors buying, it is within that middle market space. So that has definitely driven a lot of activity overall and something that we spend a lot of time talking about with our, with our clients. And then secondly, to your point on the private credit, direct lending side, that also has been just a massive trend impacting sort of that part of the business with these companies looking for

• 15:03Speaker 04

  alternative sources of capital and direct lending being a great, a great alternative. That's in fact why we as a firm sort of developed our own direct lending capability a couple of years ago. And I think that the great benefit of that is again, we sort of pride ourselves on being kind of financing or product agnostic, right? We can do a traditional bank loan, we can do sort of a sort of, you know, public execution in the, in the public debt markets, or we can do a direct lending transaction, sort of whatever best fits the company's objectives, we can sort of do it all.

• 15:30Barry Ritholtz?

  So, so let's talk about that because, you know, part of your job description is delivering a cohesive banking experience to fast-growing companies. So the two different divisions that you're running or head or co-head, innovation economy and specialized industries, obviously have to work together. What other divisions at JP Morgan are you collaborating with?

• 15:53Speaker 04

  Sure. So I would say just generally, we collaborate across the firm in everything that we do. So the commercial bank, just very broadly speaking, regardless of industry, regardless of what aspect of the commercial bank we're talking about, we're constantly working with our partners in the investment bank when companies need, obviously, excuse me, strategic capital raising. M and A advisory, whatever the case may be. So we're constantly kind of working in conjunction with one another. And at the same time, we are often working with our asset management colleagues when companies have, you know, large cash balances that they need to invest and our private banking colleagues. And I think a good example of that is within the innovation economy kind of ecosystem overall, where because it is so interconnected, when you think about VC firms funding, you

• 16:37Speaker 04

  know, portfolio companies, those portfolio companies having founders, they're oftentimes they're repeat founders. It's important that you can serve sort of the needs of that entire very interconnected ecosystem. So bankers on my team, on the innovation economy team are serving those portfolio companies, right? But at the same time, we're working with our colleagues in asset management and the private bank who bank the VC firms themselves and bank the VC partners and the founders for their private wealth needs. So our objective is to deliver sort of all the needs of the ecosystem. And that's why sort of by definition, we're always working across lines of business.

• 17:11Barry Ritholtz?

  So really what you're saying is from a checking account up to a secondary financing, private debt, up to an IPO, and even beyond that, if there's an acquisition or a merger, you guys are a full service, not only commercial bank, but investment bank. There really isn't any space that you guys can't play in and service exactly what a fast growing startup needs.

• 17:38Speaker 04

  Exactly. You said it perfectly. And as I often like to say, we serve companies from startup to IPO and beyond. And so, you know, again, we believe we're really one of the few firms who can actually serve every need of these companies. And again, the founders themselves.

• 17:53Barry Ritholtz?

  Huh, really, really interesting.

• 18:26Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 19:08Speaker 01

  and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.

• 19:49Barry Ritholtz?

  So let's talk a little bit about middle market banking. You referred earlier the definition of middle market banking as up to $2 billion in revenues?

• 20:00Speaker 04

  Top line revenue.

• 20:01Barry Ritholtz?

  So that's, this is not a little, these are not all little companies. That's a, $2 billion in revenue is a pretty decent sized company.

• 20:08Speaker 04

  Absolutely. And again, we have teams focused on the smaller size, what we call emerging middle markets. So think about that as kind of 20 million to 100 million in top line revenue. Innovation economy doing the high growth, you know, VC-backed startups. And then a bunch of different industries, obviously, within kind of that broader commercial banking universe and bankers that are focused simply on 100 million and plus in top line revenue.

• 20:30Barry Ritholtz?

  That's, that's really interesting. And we've talked earlier about the role of venture banking in this. Where does that fit in? Where does venture capital fit into startups? And where does venture banking fit in as companies get a little larger?

• 20:44Speaker 04

  Generally speaking, and our objective is to really become the company's primary operating bank and trusted advisor from the very beginning, right? And so as an example of that, we now have a startup banking team that actually covers companies at pre-seed and seed stage. So oftentimes, it could be before they've even raised an institutional round of capital. And at that point in time, their needs are very sort of simple, if you will, right? They need a bank account, they need to pay their employees, they need a way to sort of collect funds, they may need a credit card, just very simple banking needs. And then obviously, as the companies continue to grow, those needs become more complex over time, including the need to either raise additional capital, and whether that be from a venture capital fund or whoever that may be coming from.

• 21:28Speaker 04

  They may need some debt financing, and sort of on and on and on in terms of what they ultimately need to achieve their objectives and kind of become the company that they want to become.

• 21:37Barry Ritholtz?

  So what's the split between the companies you work with that are VC-funded, that are private equity-backed, or just bootstrapped by the founders themselves?

• 21:46Speaker 04

  So I would say, again, it would vary significantly depending on the industries that we're talking about, but if just we focus on the innovation economy business specifically, the vast majority of those are going to be VC-backed. As I mentioned, of course, you know, sort of the crossover, if you will, between growth equity and VC, the lines continue to get blurred. But I would say about 20-ish percent of the business is sort of PE-backed and the rest is VC-backed, just broad numbers.

• 22:10Barry Ritholtz?

  Bootstrapping still goes on?

• 22:11Speaker 04

  It does, again, and you see that certainly at the sort of pre-seed and seed stage. But I would say it's still, it's a minority, right, of the larger companies within the innovation economy business.

• 22:22Barry Ritholtz?

  So I'm thinking about their balance sheet. What's the split between how much is equity, how much is debt? Or do you do a combination of debt and equity? What does this look like today?

• 22:33Speaker 04

  Yeah, no, absolutely. So again, the whole purpose of having a partner like JP Morgan is that, A, we can sort of help the companies think through what the optimal capital structure is, and back to sort of the point of we're sort of product agnostic, depending on what the company chooses to do. Most of these companies that are high growth VC backed in what we call the innovation economy business tend to still be pre-profit, right? They're growing really rapidly, they're throwing everything back into the business in order to achieve scale. So for the most part, their use of debt is quite small, usually some kind of small venture debt component. And we really want to work with those companies to think about when is the right time to put debt in their capital structure, depending again on where they are in sort of that life cycle and depending on sort of what their cash burn looks like, how close they are

• 23:18Speaker 04

  to the next capital raise, what is the likelihood that they're actually going to be able to raise the next round of capital. So it is a combination of both, but again, the majority of their capital structure is definitively going to be equity, given that they're cash burning companies, generally speaking.

• 23:31Barry Ritholtz?

  And I'm assuming you're not involved in angel rounds or, you know, very early seed stuff, which kind of leads me to what sort of criteria does your team use when you're trying to figure out, hey, is this an early-stage company that we want to have a banking relationship? Can we be value-add to them? Were they still too novel, too green, no business, no revenue? Like, how did, what sort of criteria do you use?

• 23:59Speaker 04

  Sure. So I think about it as quite, as a pyramid. So there is a lot that we can do for companies across, you know, all stages of their life cycle. But when you're talking about the very early stages back to, they have fairly simplistic needs, right? And so we want to be able to bank and can bank as many of those companies as possible, assuming that, you know, there's, we don't find anything from a reputational risk perspective or something or an industry that we think is challenging. But I think, again, becoming their primary operating bank, helping them optimize their working capital is sort of like the biggest challenge that these companies, not the biggest challenge, but one of the challenges that these companies face. So we can bank in terms of providing a bank account, credit card, again, sort of payables, receivables, many, many, many companies.

• 24:44Speaker 04

  As we think about which of the companies we're going to lend to, right, which is a sort of the next round of the pyramid, if you will, and that's, we obviously need to really assess their sustainability over time, their ability to raise the next round of capital. Because when you think about venture debt, that's really one of the gating factors. Is this company going to be able to raise the next round of capital? What's the cash burn look like to obviously get them to that next capital raise? And how are they using debt to sort of extend that runway overall? So those are sort of the types of things that we're thinking about when we think about which of those companies that are sort of credit worthy for us to be lending to and obviously support them to, again, get to the next round of cap.

• 25:25Barry Ritholtz?

  Really, really interesting. So I have a recollection of the era following the dot com ramp up and then the crash in 2000, and it felt like a lot of the major banks had moved up market, like the middle market was kind of abandoned. And lots of private equity seemed to have filled that gap. So I'm kind of fascinated that a giant bank like JP Morgan is addressing that same market segment that generally people seem to feel like the bigger Wall Street banks have abandoned. You're telling me you're focusing in that space?

• 26:05Speaker 04

  Absolutely, because I think, and I'll again, kind of focus on two segments, if you will, kind of just the broader commercial banking business and then the innovation economy business specifically. When you think about the broader commercial banking business, right, so not just high growth VC-backed companies, but small businesses overall, right, there are 300,000, you know, small businesses across, across the country that represent, you know, 13 trillion in revenues and employ 40 million people, right? So it is a massive part of the economy overall that we very much want to serve, and we've been expanding that business. Quite substantially, mainly through sort of geographic expansion over the course of the last several years. We serve, you know, 32,000 middle market companies today across our commercial banks.

• 26:50Speaker 04

  So certainly, again, there's back to a lot that we want to do and can do to support small business as kind of an engine of the economy overall that we very much think is a, there's an opportunity there for us, but it's also sort of a responsibility, right, for us to serve those businesses. I think on the innovation economy side, just back to how, I mean, when you look at the disruption going on across every industry today and the innovation, JP Morgan clearly wants to be there to support those founders with sort of the next innovative idea. And I always like to point to the fact that, you know, we've been serving innovative companies literally for over 200 years. When you look back at our history, right, we supported Thomas Edison and the invention of the light bulb, the railroads, the automobile, like those were disruptors at that time.

• 27:31Speaker 04

  But I think on the innovation economy business specifically, when we first started, I'll give you a little history of the business. When we first sort of started a dedicated focus, so we had always served early-stage tech companies in the commercial bank, but just by sort of a local banker that didn't have any expertise in tech, right, that covered all industries. So back in 2016, 2017, we put in place sort of a dedicated team of bankers. At that point in time, I would say we primarily did, we were very good in terms of our capabilities at serving, let's call it kind of Series C and beyond, right? And when I came into this role, we very much noticed that a founder, right, and for their company would walk into a Chase branch, they'd open a bank account, and then they would quickly leave that Chase branch and move to one of our competitors who were very good

• 28:16Speaker 04

  at serving early-stage, high-growth, early-stage VC-backed companies, and then they'd come back to us at sort of Series C, right, generalization. But so when I came into this role, sort of said, what are we missing, right, in that very early stage in terms of our capabilities? Like, let's skip that part where they leave the JP Morgan sort of franchise, right? And really what we were missing was sort of a very simplified treasury, what we call treasury kind of payments bundle for companies to manage working capital, a simple digital platform for earlier-stage companies, and a venture debt capability. And that's what we really built out sort of from kind of 2017, 2018, over the course of the past several years, so that we had best-in-class capabilities both for early-stage

• 28:59Speaker 04

  companies as well as late-stage companies where everybody thinks about JP Morgan as serving later stage.

• 29:04Barry Ritholtz?

  So you mentioned earlier that you're expanding geographically. We'll talk about international in a few minutes, but let's stay in the United States for a bit. I think of JPMorgan down on Wall Street, very New York-based. What geographies have you been expanding to? What parts of the country seem to be very fast-growing these days?

• 29:24Speaker 04

  Sure. Well, so I would just say today, our commercial banking business, you know, is in the 85, you know, fastest-growing top sort of MSAs across the country. We have 125 offices across the country, 2,000-plus bankers across the country. A big part of that expansion over really the last decade has been sort of California and the West Coast overall, where we, prior to the WAMU acquisition, didn't have a ton of sort of like retail presence and/or sort of boots on the ground there. So that's accounted for a lot of that geographic expansion, as well as, you know, expansion into the Southeast and sort of other states in the West. Obviously, sort of moving from what historically, you know, decades and decades ago was more of a kind of East Coast-dominated business. And that's what's accounted for a lot of the growth within the business as a whole.

• 30:09Barry Ritholtz?

  What about down south, places like Charlotte, or Nashville, or Texas, or Florida?

• 30:14Speaker 04

  Absolutely. I mean, when you look at, again, kind of depends on the industry, but when you look at the innovation economy business and kind of where some of the newer markets are from a VC funding perspective, you are seeing a lot of growth in, you know, the Phillies of the world, the DCs of the world, you know, San Diego. I mean, certainly, there's still like a huge, huge concentration in kind of, you know, the Bay Area and then kind of New York, Boston area. But there are cities, Miami's a good example. For our healthcare business, Nashville is, you know, has exploded over the past several years. So again, depending on the industry, it depends on sort of where our concentration of bankers are, but, you know, back to that's why we are in 125 cities across the country.

• 30:58Barry Ritholtz?

  So let's talk international. You spent, was it a year in London?

• 31:01Speaker 04

  Three years.

• 31:02Barry Ritholtz?

  Three years? Oh, so you're an old hand at

• 31:04Speaker 04

  There you go.

• 31:05Barry Ritholtz?

  dealing with Europe. So let's talk a little bit about what's happening in the UK and what's going on in Europe. How do you look at those markets? Can you play in those spaces? Tell us a little bit about what the work is like there.

• 31:17Speaker 04

  Sure. So I would say from a commercial banking perspective, we definitely support companies globally, and I do think that's, again, one of JPMorgan's competitive advantages as Earlier stage companies are looking to expand internationally. We can support them across, you know, basically any market they're gonna, they're going to, across, you know, both EMEA and APAC. So, yes, we support companies there. And then we have teams on the ground in Europe and Asia, etc., that are supporting early-stage companies that are headquarters in Europe and APAC, and then their expansion into the US. So, kind of doing it both ways, inbound and outbound. And again, I think that that's something that with our long history of operating in these various jurisdictions, helping to

• 31:59Speaker 04

  advise companies on sort of the right strategy as they think about those international expansions.

• 32:03Barry Ritholtz?

  Huh, really, really interesting. What percentage of your business is international? I can't imagine. JP Morgan feels like it's so dominant in the US. What's it, what's the perception like overseas? How is it?

• 32:16Speaker 04

  So, I would say for our commercial banking business, so let me separate this out a moment. So, again, the commercial banking business in the US is serving US-headquartered companies, but when they have a European sub or an Asian sub, that clearly is a smaller percentage of the company's overall revenue. So, a smaller percentage of like the revenue that we would earn as well, but we're supporting them globally. The commercial banking sort of build-out in Europe and in Asia, for bankers on the ground supporting European and Asian headquartered companies, is a newer effort, newer over the past seven or eight years. So, it's not as robust, in terms of our, robust is the wrong word, it's not as far

• 33:00Speaker 04

  along, right, as our business in the US.

• 33:02Barry Ritholtz?

  Clearly, clearly well-established here for hundreds of years.

• 33:06Speaker 04

  Hundreds of years. And we've been in Europe and Asia for hundreds of years.

• 33:09Barry Ritholtz?

  Oh, really?

• 33:10Speaker 04

  From an investment banking perspective. Hundreds of years is maybe a strong word. But for many, many, many decades, from an investment banking perspective. But the build-out of the commercial bank supporting smaller-sized companies in those markets is newer, seven or eight years ago.

• 33:22Barry Ritholtz?

  And that's a white space. That's got to be wide open now, right?

• 33:24Speaker 04

  Absolutely, absolutely. And, and again, we're finding great traction, because there is so much, obviously, as we all are well aware, economies and companies operate in such a global fashion today, that a company sitting in Europe, obviously, has, generally speaking, plans to expand in other parts of the globe, the US being a huge market, particularly across tech and consumer-facing businesses, etc. So, that, that connectivity is important.

• 33:46Barry Ritholtz?

  And you said earlier, from checking to IPO, how do you think about the IPO market, which has been so... Quiet the past few years. We really haven't seen a lot of companies coming public. How do you view this? When might that change? And how does this impact your business?

• 34:06Speaker 04

  Sure. So we are definitely optimistic on the IPO market this year. And I think even, you know, in 2024, I saw a significant uptick in issuance versus 2023. Obviously, we were coming off a low base, but we saw about $33 billion in IPO volume in 2024. We think that that could double this year, you know, just given, I think, a stable backdrop, more kind of confidence all around the markets. We've also just seen a more stable, you know, US economy. Obviously, so far, you know, knock on wood, feels like we we sort of took a soft landing right in the US. We now have rates on the decline, which is supportive of the IPO market. We'll sort of see if that, you know, how that kind of plays out over

• 34:48Speaker 04

  the course of the year. And then I think, you know, the expectation of sort of double-digit earnings growth in the coming year is also very supportive of the equity market. So we do think you're going to see a lot more activity in the IPO market this year. And obviously, there's just a ton of supply that's built up over the past couple of years of as companies have stayed private longer and waiting for a better window to access that IPO market.

• 35:09Barry Ritholtz?

  So we're recording this at the end of January. I don't recall seeing anybody's forecast for the year ahead saying, hey, really inexpensive AI from China, DeepSeek, is going to completely disrupt everything. How do you look at not just the technological disruption that we're all experiencing, but the incredible pace as to how rapid everything is advancing? How do you think about this? And how does that impact the day job? How does it impact the work?

• 35:40Speaker 04

  Sure. So clearly, you know, just talking about DeepSeek specifically, obviously, just a huge impact on the equity markets. You know, as you saw, a lot of, a lot of some of the larger names trading down significantly. We did see a rebound sort of the following day, which was, which was beneficial. I do think, you know, AI is obviously going to be continue to be a big story. Over the course of 2025, there's also just a tremendous amount of capital that needs to be raised to kind of support that industry overall. And so I do think like back to sort of the comments about sort of stable macroeconomic backdrop, rates declining, all of that will be supportive of the broader IPO market and the ability to access those markets. Yes, we're going

• 36:25Speaker 04

  to kind of continue to see volatility with some of these surprises like the deep sake example. But but it hasn't really changed our view, our very constructive view on on the market going forward.

• 36:37Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 37:19Speaker 01

  and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates quote must be willing to work extended hours and weekends as needed. One major perk for all that hard work? Employees access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at

• 38:00Barry Ritholtz?

  Let's talk a little bit about some of your thoughts on leadership at the bank and long-term strategy. If we go back five or six years, you're a managing director and head of specialized industries. What types of firms were you working with then? And are you still working with the same firms? Or has your portfolio widened since then?

• 38:22Speaker 04

  Well, I would say the portfolio has widened in the sense that we've continued to add various industries. So specialized industries, I think I mentioned before, it's 19 different industries that

• 38:32Barry Ritholtz?

  Give us some examples.

• 38:33Speaker 04

  Yeah. So that spans a very wide remit. So some of our very mature businesses, for instance, our government business, supporting states and municipalities and school districts across the country. We've been doing, excuse me, doing that since, you know, JP Morgan sort of was founded. So the government business, our not-for-profit healthcare, higher ed and nonprofit business, again, two very mature businesses. We also have, you know, beverage, food and ag, our M&C business, supporting some of the subsidiaries, media, communications and digital infrastructure, very hot sector right now in terms of the huge need for data centers and capital for data centers overall. The innovation economy business, again, as I mentioned, sort of part of all that. So those are some examples of the industries that fall within that remit.

• 39:14Speaker 04

  So again, when we first started specialized industries, I'm not going to remember the exact number, but we probably had five industries within that, right? And so we've just continued to build out that dedicated expertise over the course of the past several years, which we've just found great success in.

• 39:30Barry Ritholtz?

  So how do you assess risk when you're rolling into a new sector or specialized industry? When you're working in a space for a while, you kind of learn what the, you know, where the mines are laid. When you move into a new space, how do you approach that?

• 39:47Speaker 04

  Well, I would just say, it's not as if we weren't banking companies in each of those industries before. It's simply that we did not have dedicated bankers that only did that, right? So back to this is why we very much believe, and it's been proven out in terms of the growth that we've seen in sort of the specialized industries business. So we sort of... Focus in on the sectors where we think it makes a difference for the banker to have that industry expertise. Keep in mind, we partner with the investment bank on the M&A advisory and strategic capital raising, and they are all industry focused, right? But does the commercial banker need that industry expertise? Is there something very different about the credit risk associated with those industries that banker expertise helps and that we need sort of dedicated credit teams, again, with

• 40:31Speaker 04

  the focus on those specific industries? Is there something different about the product and solutions set for those companies that would require us to have that dedicated focus? Back to kind of the innovation economy business, as I was saying earlier, we didn't have the early-stage capabilities that we needed, you know, seven, eight years ago, and that's what we -- and it was a very kind of bespoke to those high-growth companies and the challenges that we -- that they face, that led us to kind of build out those digital capabilities and bundled solutions. So that's a good example of why we felt like we needed to build that as an industry.

• 41:03Barry Ritholtz?

  So it's kind of fascinating that you're serving clients who are rapidly innovating, expanding into spaces that wholly unforeseen. How do you keep up with that? How do you make sure that you're innovative and cutting-edge? And how do you build this when it's almost as if your clients are outpacing, you know, the rest of the market?

• 41:26Speaker 04

  Absolutely. And I would say that is one of the best parts of my job, is meeting with founders all day long and really, obviously, hearing about their businesses and what they are doing to kind of disrupt industries, new technologies. And that is extraordinarily rewarding in terms of hearing about that and how we can help support that growth overall. It is very different, meeting with, again, kind of back to my earlier background, spending time in debt capital markets, you're basically covering Fortune 500 companies. It's very -- which is its own unique circumstances, and those companies have their own challenges. But it's very different speaking to the treasurer, CFO, or CEO of Fortune 500 company than a founder, right? Like, there's just -- it's a very different...

• 42:11Barry Ritholtz?

  Different focus, different priorities, different experience and skill sets.

• 42:16Speaker 04

  So that, again, is sort of the most fun part of my job, is being able to interact with all of those founders and hear about sort of the technology to come.

• 42:23Barry Ritholtz?

  So I'm intrigued about the work you did in debt capital markets, especially... When you were in Europe for three years, how did, what are the major differences between the way we manage debt capital markets and the way they do? Is it structural? Tell us about, you know, why is it that, are they very similar or are they different?

• 42:45Speaker 04

  Well, so a couple of things I would say that, just one in terms of how we think about covering companies and debt capital markets. In the US, we're organized by industry team. In Europe, for obvious reasons, we're organized by country team, given language differences. So that again was something that I very much enjoyed was sitting back in DCM, you're in the trading floor environment. I would have my UK team over here, my Germany team, my Italy team. So, you know, everyone's speaking different languages. I kept thinking I was going to learn five languages by osmosis. That did not work, so unfortunately, that's not the case. But that was, that was a great experience overall. I was, you know, the European debt capital markets are, tend to be a little bit more volatile than the US. It's also because they are a lot smaller, right?

• 43:28Speaker 04

  In terms of just the total volume, the investor base that sort of supports those markets all around. And so that's one of the major differences. What I would say is for larger global companies, having access to that European market has been quite advantageous, both from a capacity perspective, if they were running up against capacity constraints for a very frequent issue, obviously, in the US. And two, just from a cost of funding perspective. So over the last several years, given the divergence in interest rates between the US and Europe, for many companies, it's actually been cheaper to issue bonds or, you know, access the debt markets in Europe than it has been in the US, right? US interest rates were higher.

• 44:09Speaker 04

  So that's obviously just a great alternative, right, for companies when they need to access enormous amounts of capital and/or are obviously very focused on sort of what the, what the most advantageous cost is.

• 44:21Barry Ritholtz?

  So I know you're not an economist, so I'm not going to ask you that question, but it just feels like Europe cannot get out of its own way for, I don't know, past five years, 10 years? Go back to Brexit and nearly Grexit. What's going on that Europe seems to be almost structurally lagging the US and having such difficulty finding its footing?

• 44:46Speaker 04

  Well, I'm also not an expert on politics, so I'm not going to comment on that because I think there's something to be said there. But what I would say from sort of a structural perspective is I think probably the one of the bigger differences today is demographics, where kind of working age population in Europe is declining. I think it's still growing modestly in the US and obviously that will turn in the US at some point in time. But so that has been sort of one issue in Europe. I think the post-COVID recovery in Europe was a lot more challenging primarily because of the Russia-Ukraine war and sort of the energy crisis that they faced, given a lot of their energy was coming from, or energy supply was coming from Russia. So that had a very different impact in Europe than it did in

• 45:28Speaker 04

  the US overall. If you look at Germany, obviously the largest, you know, economy in Europe, it's very still sort of heavily manufacturing based. Higher interest rates have really had hurt manufacturing, global manufacturing, and so that's had a bigger impact, I think, on Germany with those manufacturers operating globally. So those are some of the things that I would point to. And, you know, there's just never been the same labor productivity across Europe as there has been in the US. And quite frankly, just the support for innovation and tech, right, and new technology. And I think that's just had a big impact back to Germany's heavily manufacturing based, right? The US probably less so.

• 46:06Barry Ritholtz?

  Because we're more service oriented, is that the thinking?

• 46:09Speaker 04

  More service oriented. And I think, again, you don't have the same, I think a lot of countries in Europe are looking to put in place policies to better incentivize some of the technological development. But I mean, you don't have a Bay Area type.

• 46:23Barry Ritholtz?

  Right.

• 46:24Speaker 04

  Right? I mean, you have little pockets of that kind of concept, right, where you have sort of this ecosystem coming together to disrupt and innovate and support new technology. But there's not, there's nothing as sort of big as the Bay Area in Europe.

• 46:37Barry Ritholtz?

  But you do have world-class manufacturing throughout Europe. And I think of Mercedes, Porsche, BMW in Germany. You think of all the, I guess it really doesn't scale, watchmaking and things like that. But there are some really high-end companies that are incredibly successful. Are they just the exceptions? What is it? I'm trying to conceptualize.

• 47:02Speaker 04

  Sure, but I also think it's much more fragmented, obviously, than the US market with each different country with its own rules and regulations and, you know, some sort of more nationalist policies than others. And I think that just has an impact on their ability to kind of dominate. And we're talking about Europe as if it's one thing, but it's not.

• 47:19Barry Ritholtz?

  But it's not. So you're saying, really, it is structural. It's not. So the combination of these structural challenges, relatively high interest rate, less productivity gains, and a focus that's less service-oriented, more manufacturing-oriented.

• 47:36Speaker 04

  Demographics.

• 47:38Barry Ritholtz?

  And demographics. So the people who have been waiting for, hey, you know, Europe is going to catch up. It's going to mean revert any second. That doesn't seem to be in the imminent cards anytime soon.

• 47:51Speaker 04

  I don't think that's in the 2025 cards. Let's put it that way.

• 47:55Barry Ritholtz?

  Okay. Hey, that's fair. That's a perfectly fair thing. I want to talk a little bit about some of the work you've done on women in banking. You were on the Women on the Move podcast. And one of the things you said that struck me was, women don't have as robust of a network as men do. Explain.

• 48:19Speaker 04

  So that was a little bit of a generalization, probably. But I think what I meant by that was, if women tend to stick to, because I think... Often earlier in their career, and probably I did the same thing, early on that you stick to sort of the women's network that you develop, right? And there's a lot of sort of women's networking events, I'll speak for, you know, financial services specifically. If you only stick to that network, there's still a lot fewer women in sort of banking, or pick many industries, right, than there are men. And so that limits kind of that network overall. And so I think like important that you're spending time with people across the organization, picking mentors across the organization, networking across the organization to make

• 49:01Speaker 04

  sure that you're developing the same robust network that sort of some of your male colleagues would already be doing.

• 49:08Barry Ritholtz?

  So I also read you value and prioritize mentorship. How do you approach this at your job? We'll get to questions about who your mentors were, but do you have mentees? Are you practicing what you preach?

• 49:24Speaker 04

  Yes, and I very much take that as a serious responsibility and sort of part of my day job. You know, we have various, I would say, organized programs, and then there's more informal, you know, mentorship programs, and I think both are important. But I think over the years, you know, making sure that all of the senior individuals are sort of participating in those mentorship sponsorship programs, giving younger people sort of the opportunity to learn from someone else about their career. And again, sort of doing the informal mentoring. I think back to the JP Morgan culture, I think it's just very endemic there. Someone reaches out, you know, to have a cup of coffee with you, you go do that, right?

• 50:07Speaker 04

  And it's just sort of something that's expected and something that sort of I grew up with, if you will. And so certainly something that I, again, take very seriously.

• 50:14Barry Ritholtz?

  So when I first started this podcast, I want to say almost 11 years ago, it was very hard finding women in senior leadership roles and having them come on as guests. That has become much easier. I'm curious how you see... The industry as, as once male dominated, it's still mostly male dominated, but it feels like it's improving somewhat. What are you, what's your perspective?

• 50:43Speaker 04

  I do think that a lot of progress has been made overall. I think, you know, JP Morgan, not to toot our own horn, but I think is a great example for the industry where you look at, you know, our operating committee, which are the individuals that report directly to Jamie, you know, it is heavily female.

• 50:58Barry Ritholtz?

  Jamie, I'm sorry, I'm not familiar. Who is that?

• 51:01Speaker 04

  There are many, many females on the operating committee, so we've done a great job there. And I think that that's kind of, you know, filtered down throughout the organization. So yes, I do think it has improved substantially. I do still think there's a lot of challenges, particularly at that sort of VP, late VP, early ED level, early executive director level. A lot of times when people are having sort of their first, their first children and sort of making sure that we're providing this a supportive environment that they're able to obviously, you know, come back to work as they would like to. But yes, I think significant progress has been made. But I think that is a very intentional effort back to kind of understanding why if we are losing female employees or diverse employees, why that is. In the same way that we want to understand why we're losing any employee,

• 51:45Speaker 04

  right? Any talented employee, we don't, we don't want to lose. But I think you have to be just very intentional about measuring progress and, and understanding what the challenges are and if there's anything that you can do or should be doing to have a more sort of accommodative environment and inclusive environment.

• 52:02Barry Ritholtz?

  So I have a question later about advice to recent college grads, but as long as we're talking about women in banking, let's stay focused on that here. What advice do you have for any young woman who wants to become part of the financial sector or banking industry?

• 52:21Speaker 04

  I would just say, really taking advantage of

• 52:26Speaker 04

  Friends, colleagues, you know, your network, peers, to understand all aspects of the industry. And, you know, that's hard to do sometimes when you're in college and you're not sort of sitting in the organization. But I do think, and this is not a commentary on females versus males, but just sort of back to the networking point, you have kind of a natural advantage if your parent was an investment banker, or a lawyer, or, you're right, that dealt with with sort of the banking industry, or, you know, pick another sort of adjacent profession. And so, you know, those individuals know the right questions to ask, are more aware of the opportunities across the firm. It's not just investment banking, there's lots of other things we do at JP Morgan or any firm.

• 53:11Speaker 04

  So I think just making sure that you're figuring out how to kind of gather that information and ask all of those questions, so that you're a little more educated coming in about sort of what the opportunities are overall.

• 53:22Barry Ritholtz?

  Huh, really interesting. So let me throw you a curveball question. We talked earlier, not only about your ballet at age four, but dancing professionally for three years. You're a member of the Board of Trustees for American Ballet Theater. That's the pinnacle of dance in America. Tell us a little bit about the organization, how you found your way to it, what are you doing with them?

• 53:48Speaker 04

  Sure. So I have been on the board since 2009.

• 53:52Barry Ritholtz?

  Oh, wow, that's 15 plus years.

• 53:54Speaker 04

  Yeah, so a long time. So again, American Ballet Theater, one of the greatest ballet companies in the world, based here in New York, officially designated by Congress as America's national ballet company. And actually, as of January of this year, I am the new chair of the Board of ABT, which is super exciting. But, you know, the board obviously has its basic sort of governance functions, but, you know, we spend a lot of time helping with fundraising for the organization and helping provide, you know, expertise where each individual has it. Any nonprofit, obviously, has a much more limited sort of staff overall. So if there's people on the board that have real estate expertise, or finance expertise, or HR expertise, that is very valuable to the organization as a whole.

• 54:38Speaker 04

  So there's always sort of special projects that we, you know, sort of participate in from that perspective. But a big chunk of what the board does is really making sure people are aware of ABT.

• 54:50Speaker 04

  Helping with fundraising, helping attract new donors, helping attract and develop new audience members.

• 54:56Barry Ritholtz?

  Huh, really, really interesting. Have past board members and/or chair people been former professional ballet dancers? Or is this unusual?

• 55:08Speaker 04

  There's always a few, but certainly the majority of people on the board don't have a background in dance. And as I always remind everybody, I call it the separation between church and state. The board is there to sort of help with the business of running the ballet company. They have no input whatsoever to anything artistic, which is why it's not required that you have any sort of background in.

• 55:28Barry Ritholtz?

  But I'm curious if there have been previous chair people who were professional ballet dancers?

• 55:33Speaker 04

  That I would have, I don't think so, but I'm not 100% positive. But I don't think so. Our previous chair, who retired at the end of last year, his sister danced with the company for many years. And that's really how he became involved and obviously, you know, very passionate about the ballet.

• 55:49Barry Ritholtz?

  Really, it's one of those fascinating things that just I don't see on people's resumes all that often. And I had no idea you were chairman, but it's really fascinating. All right, so while I still have you, let's jump to our favorite questions that we ask all of our guests. Speaking of entertainment, let's start with, what are you streaming these days? What's keeping you entertained? It could be Netflix, podcasts, whatever. What are you enjoying these days?

• 56:14Speaker 04

  So first, I would say I am sort of an avid reader. I was talking with a colleague on my way over here. Everybody consumes information differently. I consume it better reading, I think, than always, always listening.

• 56:26Barry Ritholtz?

  I'm the same way.

• 56:27Speaker 04

  So I'm sort of very religious about getting through The Economist and The New Yorker every week. And I won't let myself read the next issue of The Economist until I finish the first one. So even if I'm behind, I do that.

• 56:38Barry Ritholtz?

  I'm in 1986, if I follow that rule.

• 56:42Speaker 04

  There you go. I might have to get that up at some point. I am currently streaming, I guess, the second season of The Diplomat, which I'm very much enjoying.

• 56:50Barry Ritholtz?

  So good.

• 56:51Speaker 04

  I love the political action thrillers, but I think I'm running out of them because I've watched all of them at this point.

• 56:56Barry Ritholtz?

  Lioness, have you seen that?

• 56:57Speaker 04

  Oh, no, I haven't seen that. Okay.

• 56:59Barry Ritholtz?

  So a little more intelligence community slash tip of the spear.

• 57:05Speaker 04

  Okay, okay.

• 57:06Barry Ritholtz?

  But, you know, the same sort of... Back and forth, layers of intrigue, but I really enjoyed The Diplomat. I thought that was fascinating. And then, what was it, Secretary of State was the other one?

• 57:19Speaker 04

  Madam Secretary.

• 57:20Barry Ritholtz?

  Madam Secretary, that same concept.

• 57:22Speaker 04

  I will admit, I've watched it a couple of times.

• 57:24Barry Ritholtz?

  Oh, really? I thought she was great.

• 57:26Speaker 04

  Yes, exactly. I think it's a good pick-me-up, particularly when partisan politics are depressing everyone. It's good. There's always a happy ending. I appreciate that.

• 57:36Barry Ritholtz?

  Anytime you have an ability to go to a space you're wholly unfamiliar with and be challenged, it's not just entertaining, but it clears the cobwebs out a little bit.

• 57:46Speaker 04

  Exactly.

• 57:47Barry Ritholtz?

  Really interesting. So, we talked about you as a mentor. Who were your mentors who helped shape your career?

• 57:55Speaker 04

  So, I would say I feel very lucky. When I was, most of my career, when I was in debt capital markets, I worked for a woman who ran DCM at the time, and then she went on to do different things at the firm, who was very much a sponsor, mentor for me overall. And it's just, over time, she's retired now from JP Morgan, but sort of become a friend. But I think that's where I really, I think, learned and embraced kind of just this concept of attracting talent, retaining talent, helping to kind of bring up the next generation of women is a responsibility of senior people. And she really demonstrated that, and certainly I took that to heart.

• 58:38Barry Ritholtz?

  So, since you are a reader, let's talk about books. What are your favorites and what are you reading right now?

• 58:45Speaker 04

  So, favorites are hard. But what I'm reading right now, so I actually just finished, over the holidays, I tend to alternate between fiction and nonfiction.

• 58:55Barry Ritholtz?

  Okay, I get that.

• 58:56Speaker 04

  Because I think both are important. Finished Chasing Hope, the Nicholas Kristof book. He's a foreign correspondent for The Times, which is interesting. I finished a biography of Alexei Aramsky, who's a choreographer. I don't think many, many listening to this podcast may find that book interesting, but I did. A new fiction by Michael Cunningham called Day. So, those were all really good. Some of my favorite authors, Isabella Endig, Dave Edgers.

• 59:26Speaker 04

  That's what I would say.

• 59:26Barry Ritholtz?

  Eggers is kind of funny if we're talking about the same guy, right?

• 59:30Speaker 04

  And he has funny titles, which I love. "Heartbreaking work, a staggering genius."

• 59:33Barry Ritholtz?

  Yes.

• 59:33Speaker 04

  One of his first books. Love that book, yeah.

• 59:36Barry Ritholtz?

  So we're down to our last two questions. And this is a broader question than I asked earlier. What sort of advice would you give to a recent college grad interested in a career in either banking or finance?

• 59:52Speaker 04

  I think to make sure that they embrace risk-taking. And I say that because, maybe just because I myself maybe am a little bit risk averse. But I think over the course of your career, you have the opportunity often to do many different things. And a lot of times, people are afraid to sort of leave their current group and do something different. And it just opens up a whole world of possibilities. So I think sort of taking a little bit more risk than you might naturally do is always good advice.

• 1:00:25Barry Ritholtz?

  And when you have no spouse, no mortgage, no kids, that's the time

• 1:00:28Speaker 04

  Easy to do it.

• 1:00:29Barry Ritholtz?

  to fall on your face because you get up, dust yourself off, and start over again. It's funny how when you're a few years past being young, that's obvious. But at the time, it doesn't feel that way.

• 1:00:41Speaker 04

  Well, and it feels like such a big risk.

• 1:00:43Barry Ritholtz?

  Oh, my God. It's so risky. Right, exactly. And our final question. What do you know about the world of banking and investment and growth companies today that would have been really helpful 25 or so years ago?

• 1:00:56Speaker 04

  That's a really good question.

• 1:00:58Barry Ritholtz?

  And it's not, "I should have bought Nvidia when it was 50 cents." It's like, what philosophically would have been useful to know? That you eventually figured out?

• 1:01:08Speaker 04

  I think because I started in the investment bank and then by definition was really working with primarily larger-sized companies, I think, as I kind of mentioned earlier, understanding how different it is and the fact that you have the ability to make an even bigger difference for a smaller-sized company that needs that sort of trusted advisor even more, I think it would be sort of good to know, right? Because it is, I think financial services overall, you have the ability to take on a lot more responsibility at an early age than other industries. But I think, again, the ability to kind of influence and advise an early-stage company is just incredibly rewarding, given the limited resources, staff that they have.

• 1:01:51Barry Ritholtz?

  Melissa, this has been absolutely fascinating. Thank you for being so generous with your time. We have been speaking with Melissa Smith. She is co-head of Commercial Banking for JP Morgan. If you enjoy this conversation, well, be sure and check out any of the past 500 or so we've done over the previous 10 years. You can find those at iTunes, Spotify, Bloomberg, YouTube, wherever you find your favorite podcasts. And be sure to check out my new book, How Not to Invest, coming March 17th, wherever you get your favorite books from. I would be remiss if I did not thank the crack team that helps put these conversations together each week.

• 1:02:35Barry Ritholtz?

  Sarah Livesey is my audio engineer. Anna Luke is my producer. Sean Russo is my researcher. Sage Baumann is the head of podcasts at Bloomberg. I'm Barry Ritholtz. You've been listening to Masters in Business on Bloomberg Radio.

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