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  • JPMorgan’s Top Europe Bankers See Rising M&A as Crisis Wanes

    JPMorgan’s Top Europe Bankers See Rising M&A as Crisis Wanes

    (Bloomberg) -- European companies are still chasing their dream deals as they look beyond the damage wrought by the coronavirus crisis, according to JPMorgan Chase & Co.’s top two bankers in the region.Dorothee Blessing and Conor Hillery, co-heads of investment banking in Europe, the Middle East and Africa at the U.S. lender, say talk of dealmaking is picking up amid signs of economic improvement and buoyant stock markets.“Companies across sectors are not shying away from large transactions, and are using this time to do deals they have been looking at for a long time,” said Blessing. “In many cases, it’s with the goal of investing in the future rather than just defensive moves.”While the pandemic has dragged global deal volumes down 32% in 2020, there have been signs of a recovery in the second half. Companies led by Japanese conglomerate SoftBank Group Corp. and U.S. pharmaceuticals group Gilead Sciences Inc. have just ensured the fastest start to a week for mergers and acquisitions since late November 2019.“Strategic M&A dialogue continues to happen and we have seen deals taking place despite the crisis, whether it’s in telecoms, technology or health-care sectors,” said Blessing. “As we see the economic environment improving, we should see boardroom confidence grow.”One industry where JPMorgan expects to see more deals is European banking, long-tipped for consolidation. On Monday, it emerged that UBS Group AG Chairman Axel Weber has been studying the feasibility of a mega-merger with rival Credit Suisse Group AG, while in Spain, CaixaBank SA said Friday it will buy Bankia SA to create the country’s largest lender.“Many banks are struggling to be profitable as they deal with cyclical and structural headwinds,” Hillery said. “We’ve seen a change in attitude to M&A that increases the likelihood of consolidation.”“M&A is now about improving profitability in a very challenging environment,” Hillery said. “There is a push for diversification to different areas that are not beholden to interest rates, whether that’s wealth, asset management, insurance or payments.”Some of those deals are already happening. Schroders Plc, the U.K.’s largest stand-alone asset manager, said Friday it was buying family office Sandaire in a bid to expand its businesses catering to ultra-wealthy clients.Blessing and Hillery were promoted as part of a recasting of JPMorgan’s investment banking leadership in February, just before the Covid-19 pandemic brought an abrupt halt to deals globally and forced many companies into the capital markets for funding.More recently, stability in stocks has seen initial public offerings return to Europe, with German mobile home maker Knaus Tabbert AG, French cloud-computing provider OVH Groupe SAS and Polish e-commerce group Allegro all preparing to list. Shares in THG Holdings Ltd. surged as much as 32% on the online shopping emporium’s London debut this week.“We are seeing a resurgence in IPO activity with very attractive valuations for issuers,” Hillery said. “We expect to see a growing number of companies access capital markets in the coming weeks because the market is particularly buoyant right now.”JPMorgan is the most active bank this year on equity, equity-linked and rights offerings in EMEA, according to data compiled by Bloomberg. It had a role on IPOs including those of THG and coffee maker JDE Peet’s BV.While some JPMorgan traders in Manhattan were sent home this week after an employee tested positive for Covid-19, the U.S. bank is attempting to return to the old ways of doing business face-to-face. About 50% of its investment bankers are now back in key offices like London and New York, according to Hillery. “For now, that balance between the office and home is working well,” he said.JPMorgan will look to increase these ratios in the coming weeks as dealmaking is best done with bankers in the room with clients, especially for difficult negotiations, Hillery said.(Updates with latest developments in Spanish banking merger in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Big Firms Are (Finally) Boosting Child-Care Benefits

    (Bloomberg Opinion) -- Whether your company is pushing employees to return to the office, a la JPMorgan, or letting them stay home, a la Google, Deutsche Bank and pretty much everyone else, the question remains: What the heck to do with the kids?The U.S. remains a confusing patchwork of partially open, partially closed schools. Children learning via screen need supervision to help them stay focused. So far, that’s mostly meant parents. In the spring, 60% of working parents functioned with no outside child care, according to a BCG survey, spending an extra 27 hours each week taking care of the children, helping them with school and doing other household tasks. Half admitted it had hurt their work performance.This has left companies scrambling to figure out how to get the work done — and prevent employees from burning out.It’s terra incognita for a lot of organizations. Many companies tend to think of children, when they think of them at all, as a kind of private hobby. Studies on working parents have confirmed again and again that bosses more readily give time off to employees for non-child reasons — like a bucket-list vacation or training for a marathon — than they do to those who ask for the same amount of time to raise children.Change is long overdue. Pre-pandemic, offering family-friendly benefits was fairly rare — rare enough to prompt the Society for Human Resource Management to note, in its rather dry way, that “benefits in this area may represent an opportunity for employers as they are often among those that generate the most enthusiasm from employees, and many can be provided at low cost.”One in four companies allow parents to bring kids to work in a child-care emergency, according to SHRM, but only 11% offer a child-care referral service, and just 4% offer a child-care program. Non-family benefits are much more common: 56% of firms offer tuition assistance, 39% acupuncture coverage and 15% pet health insurance. Yep, pet health insurance.The pandemic has started to alter that calculus. Companies are starting to realize that they can’t leave working parents twisting in the wind, trying to figure this out individually with their supervisors — the problem is too big. “It is a business issue,” says Ellyn Shook, chief leadership and human resources officer at Accenture. This isn’t something you can fix by being the world’s most flexible boss, or most diligent employee.So employers are starting to offer more tangible help, especially those in the finance, consulting and tech industries. This is no surprise — these sectors have more cash than most and compete ruthlessly on talent. “In February, unemployment was record-low,” says Shook. “We were truly in a war for talent. I believe we will be back there again. And actions companies take today will be long remembered.” With that in mind, talent-focused firms are rethinking how to support working parents.JPMorgan, Citigroup and Bank of America have all boosted child-care benefits. For example, JPMorgan is offering employees discounts on tutoring, learning pods and full-time child care, and increasing employee access to emergency backup child care. Citigroup will help employees find other families to join their learning pod, and Bank of America is offering to reimburse parents to the tune of $75 or $100 a day to pay for child care, depending on their salaries.Accenture is leading an effort with Bright Horizons to get kids ages 6 to 12 into some semblance of school — a subsidized day-care program for groups of 10 to 12 students, who would follow their own public school’s remote learning lessons under adult supervision. Bank of America and Microsoft are among the other firms that have signed on. Shook explains that they’re offering the program through a cost-sharing mechanism in which the company will pay 75%, so that the cost to the employee is roughly $5 an hour.Dell Technologies, too, is offering a menu of new options for parents, says Kristi Hummel, senior vice president of human resources. The company is expanding employee access to nanny placement services; to tutoring, whether virtual, one-on-one or group-based; and to a service that helps parents find off-site child care. They’ve also granted access to a marketplace parents can use to find a nearby learning pod of the right age group for their child.A cynic might say — especially given JPMorgan’s well-publicized attempts to get employees back to the office — that this is all just a way to get parents to work harder. But the parents I’ve talked with would dearly love to do just that. They adore their children, of course, but they want to stop being Zoom-enabled teachers’ aides and go back to their day jobs.And some observers will no doubt find it strange that private firms are engaged in helping employees make child-care arrangements. Perhaps it seemed strange when corporations started to offer access to health insurance, too.Not everything to come out of this horrible pandemic is itself horrible, and if more companies start supporting their working parents, that could be a real silver lining. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Sarah Green Carmichael is an editor with Bloomberg Opinion. She was previously managing editor of ideas and commentary at Barron’s, and an executive editor at Harvard Business Review, where she hosted the HBR Ideacast. For more articles like this, please visit us at now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • JPMorgan Fund Manager’s ESG Bets Win Spot in U.K. Midcap Gauge

    JPMorgan Fund Manager’s ESG Bets Win Spot in U.K. Midcap Gauge

    (Bloomberg) -- A JPMorgan Chase & Co. fund run by one of the firm’s longest-serving investment-trust managers has won promotion to the U.K.’s midcap equity index by riding the wave of environmental, social and governance stocks.JPMorgan European Smaller Companies Trust Plc -- which wagers on firms with market capitalizations of up to 6.3 billion pounds ($8.2 billion) -- will join the FTSE 250 index on Monday after its holdings in everything from green energy producers to online drug and nutrient retailers helped it outperform a peer group and spurred a rally in its share price.“If you look at our year-to-date performance, the biggest driver has been our renewables exposure,” said manager Franceso Conte, who has run the trust for 22 years and overseen a return of 9.9% so far in 2020. Those stocks were “really, really cheap” when the fund began investing in the sector two or three years ago, which helped alleviate concerns that they would require more capital to continue growing, he said in an interview.Many of JESC’s best-performing holdings this year are clean energy producers, such as Spain’s Solaria Energia y Medio Ambiente SA, which has more than doubled in value, as well as France’s Voltalia S.A. and Germany’s Encavis AG, which have added 63% and 55%, respectively. Its focus on renewables is paying off amid an accelerating shift toward solar and wind power, with a report in June saying more than $2.7 trillion has been invested in building up renewable energy capacity over the past decade.‘So Much Demand’“Think of some of those enormous tech companies in the U.S. that have announced they want to go either carbon neutral or even carbon negative,” said Conte, JPMorgan Asset Management’s joint third-longest serving investment trust manager. “Of course, the only way to do that is to have renewable energy, so there’s so much demand for this stuff.”The focus on renewables also feeds into the fund’s investments in the semiconductor sector. One of its largest holdings is ASM International N.V., a Dutch-listed maker of machines used to manufacture chips, whose shares are up 20% this year. “The amount of electricity that you can produce with a solar panel will keep rising, as long as semiconductors become more and more efficient,” Conte said.Wellness BetsBut it’s not just renewables and chips that have contributed to the trust’s move to the FTSE 250, a promotion that will attract index tracker funds. The firm also has stakes in “wellness” stocks like online pharmacies Zur Rose Group AG and Shop Apotheke Europe N.V., whose share prices have doubled and tripled, respectively, in 2020.Other environmental winners include Norway’s Tomra Systems ASA, a maker of bottle and can recycling machines that’s gained 33% this year.Stock OutperformanceJESC shares are up 8.1% this year, outperforming the 19% decline in the FTSE All Share Index, of which it is a constituent. That largely matches the fund’s rate of return, which slightly exceeds a peer group’s 7.8% gain, according to data compiled by Bloomberg.While 2020 has been a tougher year for many, that’s not the case for Conte’s fund, which in recent years had underperformed. Its 19% boost in 2019 was lower than a 24% return for peers, while its 21% negative return in 2018 compared with an 8.4% loss for the peer group.“What affected performance was the fact that we were investing a good part of the assets in value stocks -- cheaper stocks -- which has been a style of investing that has been very out of favor,” Conte said. “If we had been 100% growth we would have done better in the last two or three years.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.