JPMorgan traders blame the ex-colleague for a major loss. The most exposed junior bankers in London

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If traders in JPMorgan’s fixed income sales and trading businesses are receiving lackluster bonuses this year, they’ll have someone to blame: a pesky former colleague who was their manager’s favorite and defected to the credit hedge fund GoldenTree Asset Management to work for Steve Tanabaum in late October. .

Bloomberg reports that Gianfranco Canepa, former co-head of JPMorgan’s high-yield trader for EMEA, has overseen trades that generated a significant loss since his exit. The trades, which were reportedly making profits before Canepa’s departure, have since recorded a loss of almost $70 million.

Canepa has not commented on this article, and it is possible that he has a different version of events. Bloomberg reports that he attempted to contact him and did not respond. Bloomberg says his team amassed a 500 million ($526 million) position in Casino Guichard-Perrachon SA, the French grocer, and made bets on Metalcorp, a subsidiary of Monaco Resources Group SAM. Both turned sour. His Casino position included credit default swaps (CDS), which generated losses as Casino’s perceived probability of default declined and the value of the CDS declined. Bloomberg reports that Metalcorp’s position generated an additional loss of up to $20 million when the company failed to repay $70 million in debt to investors on time in October.

It’s unclear whether it was Canepa himself who placed the bets that caused the alleged loss, or the team that worked for him. Either way, it looks like the trades were profitable before Canepa’s exit, implying that the team could have acted to mitigate the situation.

Sources tell us that Canepa was a favorite of Sanay Jhamna, global head of credit trading at JPMorgan. In 2021, Jhamna reportedly promoted Canepa ahead of the rest of the team, not suspecting he would leave until a year later.

Canepa isn’t the only recent exit from JPMorgan’s high-yield business. Sebastian Pearce, the former co-head of European high yield credit trading, left for Deutsche Bank after almost 15 years at JPM in July 2021. Alun Shepherd, the former co-head of high yield trading, crossover and EMEA distressed debt, left for BNP Paribas around the same time. JPMorgan has also suffered numerous exits from veterans in its high yield and credit sales and trading businesses in recent years, including Guy America, the global head of credit trading, whose exit was announced in August. 2022. Bhavit Sawjani, banks leading yield credit trader, also left JPMorgan after 16 years in 2020 and is now at hedge fund GoldenTree Asset Management.

Following the recent loss, JPMorgan may want to add new experienced traders to its bench.

Separately, as the knives are sharpened for likely bloodshed in the analyst and associate classes in the new year, some London juniors could find themselves particularly exposed.

Financial News reports that 30% of a sample of 344 bank and boutique analysts in London changed jobs last year, up from 18% in 2020. Many went into private equity. Some went to rival banks. Private equity jobs are starting to look less secure than usual, but it’s juniors in new banking jobs who could be most at risk. Last in, first out is a cliché for a reason.

Meanwhile..

I enjoyed working on Elon Musks Twitter and sleeping on a couch at the office on Saturday night, until I was in a meeting where my laptop screen suddenly went gray and a message popped up. is displayed indicating that my password has been changed. I was fired. My boss was fired. So was his boss. And his boss boss. And their boss. (Economist)

It’s okay, Credit Suisse can be called First Boston. (FinancialTimes)

ECB staff are unhappy with their 4% pay rise. With inflation in Germany and the eurozone likely around 8.5% this year, this means a substantial loss in purchasing power. (Bloomberg)

HSBC has hired Robin Brown as a managing director within its mid-market M&A team. He comes from the Stephens family investment bank, where he led the technology team. (Financial News)

Mark Ashton-Rigby, the COO of investment bank Barclays who joined corporate and investment bank JPMorgans, is leaving. He is replaced by Vim Maru who comes from Lloyds and is much more of a retail banking type. (Bloomberg)

Credit Suisse, which is increasingly funded by Saudi Arabia, is embroiled in a $440 million legal dispute with SoftBank, which is also funded by Saudi Arabia. (Bloomberg)

The former CEO of investment bank UBS APAC bought himself 11 million with his exit payment of 45 million. After an acrimonious divorce, he is now forced to give part of it to his ex-wife. (Daily Mail)

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