JPMorgan Chase is bringing dealmaking and capital markets expertise to its shareholder advisory group as part of a broader effort to help clients fend off activist investors, ahead of what is expected to be a busy period for campaigns.
The bank has appointed veteran dealmaker David Freedman to lead its newly-created global shareholder engagement and M&A capital markets group, according to an internal memo seen by the Financial Times.
As part of the new role Mr Freedman will take over David Hunker’s responsibilities, who is leaving his post as head of shareholder activism defence after 16 years at JPMorgan, according to a source familiar with the move.
The new group advises corporate clients on how to engage with shareholders to defend the company from an activist campaign.
“One of the big differences of managing activism now is that institutional long-only shareholders are even more supportive of activist investors,” said Mr Freedman. “It’s our view that you need to address all of your shareholders whether they’re on the activist side or not.”
Mr Freedman has been with the Wall Street bank since it acquired Bear Stearns in the 2008 financial crisis, and has led JPMorgan’s M&A capital markets division over the past five years.
Some activist investors have been uncharacteristically quiet during the coronavirus pandemic amid fears that launching a public campaign during a global health crisis could backfire. During the first half of 2020, activist activity in the US almost halved from the same period last year, according to Lazard, while there was an increase in campaigns in Japan and Europe.
Bankers have urged corporate clients to prepare themselves for a surge in activity in the second half of the year, as activists re-emerge to seize on companies that have struggled as a result of the pandemic.
Meanwhile Wall Street banks are increasingly turning to technology to help clients fend off activist investors.
Last year JPMorgan launched a data analytics tool that aims to predict how investors agitating for change will influence other company shareholders. The bank is drawing on a large data set from previous activist situations at US-listed companies to help predict how various shareholders typically respond to individual activists.
UBS has also developed a tool for its clients whose algorithms analyse historical campaign data to identify which companies are most at risk of being attacked.
Alongside Mr Freedman’s appointment, JPMorgan named three regional heads to support his global role. Benjamin Wilson, a managing director in its investment bank, will head up the North America operations. Kirshlen Moodley, who has been at the bank for over a decade, will lead Emea while Koichiro Doi has been put in charge of the Asia-Pacific region.