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00:00I'm sure you didn't get any rest during the summer, just for what it's worth.
00:03But I wonder what the pipeline is looking like now as everyone comes back to their trading desk,
00:07comes back to their desk, getting deals done.
00:09Is it going to be a busy one, Dorothy?
00:11I did get a rest, as everybody else did.
00:13But look, I think we'll come off an incredibly busy first couple of months this year.
00:18I think if you look at M&A, 3.8 trillion in terms of deals, lots of mega deals.
00:25You look at the IPO issuance volume across many industries.
00:29Yes, a lot happening in tech and DI, but really across industries.
00:33And then we've seen a lot of capital raising across the broader economy,
00:38but also if you look at the broader complex on what is the AI ecosystem.
00:43So I'd say super busy first half of the year.
00:47As we look at the pipeline and the outlook, honestly, I think we see strategic dealmaking to continue to be
00:52on the rise.
00:53Absolutely.
00:54It's the boardroom discussion that is centering around the growth.
00:57You can't stand still.
00:59You have to navigate the uncertainty, but really focusing on what is that chapter for your company as you take
01:06those next steps.
01:07Equally, I think we'll look at we're now nearing Labor Day, and it's an important issue in Windows.
01:13So we have a pipeline of IPOs that is going to market, and I think the great thing about this
01:19is it's really across industries.
01:20You see this across industries, both strategics as well as sponsor-involved IPOs, and capital raising continues to a big
01:30seem.
01:30And that capital raising supports, obviously, dealmaking on the M&A side, but also is a big factor in terms
01:37of development in the broader markets.
01:39Just to kind of put some context on what you're seeing, so obviously the second quarter for JP Morgan was
01:44huge for just investment banking fees.
01:46It was your second highest ever, getting close to rivaling that high watermark in 2021.
01:51Does Q3 look the same?
01:54Is it that kind of level that we're seeing, near record levels?
01:57So if we look at the pipeline and the deals that we see, whether this is on the M&A
02:01side, whether this is on the capital raising, and really across all of the capital market business, there is a
02:07very active pipeline, and it continues to build.
02:10So that, I think, is what we're seeing.
02:11So based on what we know today, I think, across M&A, IPO, really fueled by mega deals, but not
02:20only by mega deals.
02:21And that's the important thing.
02:22You see this also across industries in terms of activity levels.
02:27We do think we might well be set for a record year.
02:31Wow.
02:31So we could surpass 2021?
02:33Looking at volumes, yes.
02:34I mean, look at volumes on M&A.
02:38We hit $3.8 trillion just in the first half, right?
02:42If you look at that, a third of that was really driven by mega deals.
02:47Pick up in cross-border.
02:49So there's a lot there.
02:50As the strategic discussions that we are having in the boardroom really evolves around where do you grow?
02:58Where is the next step?
02:59And it's navigating through the uncertainties.
03:01The world has become very complex for all of our clients, and it's all around navigating that strategic agenda and
03:07looking through those uncertainties.
03:10And I think one of the big changes relative to not only 2025, if you look at IPO issuance volume,
03:16volume is up significantly on IPO issuance year-to-date.
03:20Based on what we know today and based on what we see in our own pipeline, we see that to
03:27continue post-labor.
03:29And you've been behind some of the huge IPOs of this year, be it SpaceX, the issuances coming from SK
03:35Hynix.
03:36I'm sure you will have a big role in Anthropic.
03:38But if you look at those deals, you're in them, but you're not necessarily pole position for them.
03:42And I wonder how you're positioning JP Morgan going forward, how you can kind of edge out the competition to
03:48make sure that you get those pole positions for these big IPOs.
03:51So we're incredibly focused on our dialogues with the client, and I think the dialogue with the client is really
03:57around what is the right solution, right?
03:59So you come in in a dialogue with the client around a product-agnostic, solutions-oriented approach.
04:06That really defines the dialogue.
04:07And if you look at IPOs, we're super focused on the IPOs.
04:10We've got a strong pipeline coming into the fall, and those are real interesting deals.
04:16And the important part is it is, yes, a lot of that is driven by tech.
04:22You see a lot of that driven, yeah, but it is across sectors.
04:25You touch on IPOs and the pipeline across health care, natural resources.
04:29You go on and on and on, and as I mentioned, sponsors.
04:32And that is not to be underestimated.
04:35I've talked a lot about the strategic activity and the strategic transformation.
04:39But, look, I think sponsors have also shown us this year how they focus on the capital markets being reopened
04:47for more IPO issuance.
04:49And what we've seen in terms of the mega deals on the M&A side, we've also seen sponsors leaning
04:56in when they have the convictions.
04:57They can mobilize different pools of capital to really go in and lean into the large transactions.
05:02See, that feels important when they have convictions.
05:04But I wonder about the rest of the PE-backed market, because there's still a lot of assets that are
05:09quite stuck that I think a lot of people have been waiting to get unglued.
05:12I had a conversation earlier this year with Scott Kleiman in Berlin, and he basically had said PE needs to
05:17capitulate in order for deal flow to start back up.
05:20Are you seeing any capitulation that's starting some deal flow?
05:24So I think there are a couple of things to keep in mind as we look at the broader sponsor
05:28ecosystem.
05:29One is there are more than 30,000 portfolio companies globally that sit within sponsors.
05:36But we also should look at the dry powder that they have to deploy.
05:39Globally, 2.2 trillion of dry powder that is sitting right there to be deployed.
05:45So that is fueling new deal activity, and we've seen that getting deployed and really different capital pools being raised
05:52around those large opportunities.
05:54I think if you look at the exits, that's what you were touching on, is what we've really seen.
06:00We've come out of a world over the last couple of years, decades, where it was more the M&A
06:05and the IPO.
06:06It was really those two parts of the spectrum.
06:08The world has so much moved on, right?
06:10So what we used, what were tools that were used to bridge into solutions have really become part of the
06:17liquidity toolkit.
06:19And if you take, whether it's continuation funds, whether you look at minorities, or whether you look at NAV or
06:26other structures, that are now part of the toolkit.
06:28So we see that activity.
06:30And I think, again, the opening of the IPO market and the activity in the IPO market is something that
06:35sponsors are equally very focused on.
06:36So I know you said the breadth is wider than just AI, but if we could just sit on AI
06:40and the tech ecosystem for just a moment.
06:43A deal likely that we're hearing from sources to be in the works, NVIDIA buying Hugging Face, another part of
06:48the AI ecosystem specifically around open sourcing.
06:51It feels like a lot of these tech players, specifically NVIDIA, but the entire of the ecosystem are looking at
06:57owning more of the stack.
06:58And I wonder if that's happening a lot when you're advising clients, that they're part of the AI ecosystem and
07:03their hardware, for example, and want to branch into other areas.
07:06And if that's an enduring theme that we're likely to see in dealmaking.
07:09So I think if you look at overall dealmaking and on the M&A side of what we've seen and
07:16what we see also in our pipeline, right, there's a lot of activity in tech.
07:20And a lot of that is touching the broader AI ecosystem.
07:24And that's also not surprising because we're going through an evolution.
07:27We're going through an evolution of an entire ecosystem right there, right?
07:31So we continue to see a lot of momentum coming out of the tech space, both with respect to M
07:37&A, but also in the capital markets.
07:40I also think that if you look at – take the broader tech ecosystem, the AI ecosystem, and compare that
07:48with other industries,
07:50you are seeing a lot of questions that are out there right now is how do I look at growth?
07:56How do I look at capabilities?
07:59How do I look at supply chain, right?
08:02And then you add portfolio optimization and a lot of other things that boards and CEOs worry about and think
08:08about, both opportunities as well as challenges.
08:10So you see that also happening, obviously, on the tech side.
08:14Right. By the way, AI at J.P. Morgan, how much has it revolutionized the way you and your team
08:19are doing work?
08:21As you imagine, technology evolution is part of our business, is part of what we do.
08:25But where I'd like to start is our business is a people business.
08:30It's the trusted relationship.
08:31It's the relationships that we build day in and day out as an institution based on our capabilities, our global
08:39reach, our expertise.
08:40And I think we, as everybody else, invest in AI and are thinking through how that not only changes workflows,
08:49but it also frees up time and capacity for all of us, juniors as well as senior bankers, to engage
08:55even more with the client.
08:56Are things being automated?
08:57Like, surely people – a human doesn't need to write an S1 anymore, right?
09:00Like, is AI just completely doing that now?
09:01There are lots of different use cases that will apply across our business, and it starts in a lot of
09:08different places, yes.
09:09Dorothy, just before I let you go, you obviously, day in and day out, you and your team are having
09:13conversations with CEOs and boardrooms.
09:16There's a lot of optimism, but I just wonder what you're hearing from them from sentiment.
09:20Is there anything you're hearing, any kernels of concern that you think could derail what, by all accounts, could be
09:26another record year?
09:26Yeah, I think that the boardroom conversations that we're having, the CEO conversation that I'm having,
09:33are people are not ignorant of the complexity of the world that they operate in and the businesses that they
09:39operate in.
09:40I think the questions today and the strategic questions are also interconnected, right?
09:44So you look at growing your business, you also need to look at what are some of the challenges I
09:49have on the supply side?
09:50What are the technologies, the capabilities I need to navigate?
09:53And they are aware of not only the world has become more complex, but also more uncertain.
09:59So we're not in a risk-free environment.
10:03So those uncertainties are something that you need to navigate, and you also need to navigate that with guilt.
10:10And for us, those conversations are the real boardroom conversation.
10:13It's no longer a question where you ask a product question.
10:17It's a question where you really bring a solution, and you have to have that interconnected thinking.
10:22So standing still is not an option for our clients.
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