Insider’s Banker of the Week series appears in our weekday newsletter, 10 Things on Wall Street.
This week we’re highlighting Jenny Lee, who just left her position as a managing director on JPMorgan’s leveraged-finance desk to build a private-credit business for Brigade.
Lee’s decision comes as cashed-up direct lenders take market share from Wall Street banks that have long-dominated the leveraged-finance space.
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After almost three decades with JPMorgan, Jenny Lee vacated her role as the bank’s co-head of leveraged capital markets late last month. She is joining alternative investment manager Brigade Capital Management in October to build the firm’s private-credit business.
Lee’s decision comes as the capital markets nurses its way through a slump in dealmaking left hamstrung by volatile stock markets and a slowdown in economic growth. Big banks are also losing share in the leveraged-capital-markets business to private-credit funds, which have shown increased willingness to finance deals that banks typically underwrite and syndicate to investors through high-yield bonds or leveraged loans.
A group of direct lenders led by Blackstone Credit, for example, will provide more than $4 billion in debt for Hellman & Friedman’s and Permira’s $10.2 billion takeover of software firm Zendesk announced in June. In May, a club of lenders including Blackstone, Oak Hill, Crescent Capital, and Blue Owl, provided almost $3 billion to support Carlyle’s purchase of government contractor ManTech International, and that same month, a group led by Ares Management committed up to $2 billion in debt to back the sale of Nielsen to Elliot and Brookfield Asset Management.
For Lee, the move is something of a leap of faith. She’s leaving a top-tier bank with an established leveraged-finance platform to not just build on Brigade’s private-credit arm, but to help fundraise and invest, or participate, in direct loans. That’s everything from a direct loan to committing to a club deal with a group of direct lenders.
Led by Donald Morgan, Brigade manages more than $30 billion in assets. But it’s competing in a space dominated by larger firms like Owl Rock, Blackstone, and Ares, among others.
Leaving behind a gargantuan balance sheet like JPMorgan for an asset manager that’s competing with some of the globe’s largest investors, Lee will have her work cut out for her.
But as Insider has previously reported, Lee’s peers in leveraged finance regard her as one of the most connected bankers on the Street, who is well-placed to grow a business amid a market downturn.
After years of pressure to top league tables at JPMorgan, heading to Brigade is a new challenge for Lee, and one that comes as the capital markets moves away from years of low-cost capital and record-breaking transaction volumes.
Rising interest rates have increased borrowing costs, and dealmaking is made all the more difficult amid a bout of economic uncertainty.
But the rise of private credit means there is an opportunity for Lee to not just leverage her Rolodex of clients, but to take share from established Wall Street banks.
Bloomberg first reported on Lee’s departure from JPMorgan on July 27.
The Banker of the Week series is featured in Insider’s 10 Things on Wall Street — sign up here to get the newsletter each weekday morning.
Source : Business Insider