Exclusive-JPMorgan beefs up activism defense group, hires two managing directors

By Svea Herbst-Bayliss

NEW YORK (Reuters) -JPMorgan Chase is hiring two veteran bankers in its global shareholder engagement and M&A capital markets group, beefing up the business as corporations face increasing pressure from global activist investors pushing for changes from swapping out management to selling off the company, according to an internal memo seen by Reuters.

The bank is bringing on Duncan Herrington from consulting firm Jasper Street Partners and Lyndon Park from ICR Shareholder Advisory as managing directors. Brian Frank, a JPMorgan veteran, will also be joining the group.

The newcomers will work with the global co-heads of the group: Alfredo Porretti and Darren Novak, and report to John Hofmann, head of North America M&A. They will be based in New York.

The hires represent the biggest expansion of the team in a decade and come as activism defense, once a nice-to-have add-on service, is now a lucrative business that major investment banks and many boutiques are scrambling to offer clients.

Last year, a record number of activist shareholders mounted campaigns at global companies, including 45 who deployed the strategy for the first time, according to Barclays data.

JPMorgan confirmed the contents of the memo. Herrington and Park could not be immediately reached for comment.

Herrington, a lawyer, was a managing partner at Jasper Street where he helped the firm’s clients defend against corporate activists. Previously he worked as a defense banker at Moelis (NYSE:MC) and Raymond James Financial (NYSE:RJF).

Park joined ICR in 2018 to advise corporate boards on governance matters after serving as head of global corporate governance at Dimensional Fund Advisors and previously working in investment giant BlackRock (NYSE:BLK)’s Investment Stewardship unit.

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Frank, who has been with JPMorgan for nearly 17 years, focused on M&A Capital Markets and worked with the event driven sales & trading team.

JPMorgan restructured its efforts to assist clients when activists come knocking in 2020 and has since surged in the league table rankings that count banks’ mandates. Last year, it came in second behind Goldman Sachs and ahead of Bank of America in Bloomberg’s tally of Global Financial Advisers. In 2020, the bank ranked in the No. 8 spot, according to LSEG data.

Last year, JPMorgan defended Walt Disney (NYSE:DIS) when hedge fund Trian Fund Management pushed for board seats. The bank also worked with asset management firm BlackRock when Boaz Weinstein’s Saba Capital Management pushed for changes at some of its closed-end funds. And this year it helped Matthews International (NASDAQ:MATW) beat back a board challenge from Barington Capital Group after the two biggest proxy advisory firms recommended that shareholders elect all three of the hedge fund’s candidates.

As corporate chiefs face tumbling stock prices and uncertainty about new Trump administration policies that could hurt earnings, many feel increasingly vulnerable to activists’ demands, bankers and lawyers said. At the same time, the work of defending these corporations is increasingly concentrated among the big banks and a small number of boutiques, accelerating the need for teams to grow in order to win, they added.

Goldman and Bank of America have both reinforced their efforts over the last few years with Goldman promoting Pamela Codo-Lotti to partner last year and Bank of America hiring Amy Lissauer, who previously worked at Goldman and Evercore, in 2019 to build out the group.

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