Joining J.P. Morgan in 1987, right around the stock market crash, “was a good learning experience on the way in,” recalls Teresa Heitsenrether. She has been with J.P. Morgan ever since, celebrating her 25th anniversary last year with the oldest US financial institution. “It’s been wonderful and very diverse”, she says, “with lots of different experiences and opportunities” working in treasury, on trading desks covering clients, running business lines, developing operations and technology, and “getting a flavour for life outside the US through overseas assignments that allowed me to cultivate relationships with the international client base.”
A few years ago, Heitsenrether relocated to London to lead J.P. Morgan’s charge into European prime brokerage, and now back in New York as global head of prime brokerage, expanding the European presence remains a key target for her. Although J.P. Morgan was a relatively late entrant to Europe, the group has already overtaken rivals that started earlier, and still strives to “close the gap” in Europe – as well as in Asia. Heitsenrether is “really excited about the progress we’ve made in growing our global prime brokerage business,” as it is now a serious contender in multiple markets.
The PB platform is also very broad in terms of capabilities, offering a “full product suite.” The acquisition of Bear Stearns was a “phenomenally synergistic fit that catapulted us into the prime brokerage space,” she says, blending Bear Stearns’ prime brokerage acumen with J.P. Morgan’s equity franchise, strong balance sheet, and counterparty credit quality. Before buying Bear Stearns the barriers to entry were so daunting that even a “monumental infrastructure spend” could still have left J.P. Morgan as a second-tier player in a market that was basically dominated by two main players. Post-crisis, “the confluence of events came together in a way that really propelled the business” – in particular J.P. Morgan’s counterparty credit strength became very sought after. To compete with the global leaders on the merits of the offering and not just the firm’s credit strength, J.P. Morgan invested heavily in talent, product capabilities and geographic diversification, “to service the international wallets of both new and existing clients, including new fund and manager launches.” By the end of this year Heitsenrether envisages having “full regional capability in Asia, with everything up and running.”
“By all the leading barometers we are among the top providers globally,” she says, and “a clear leader in the US.” J.P. Morgan is “definitely full service across asset classes and strategies,” including equity, fixed income, and credit strategies. This versatility “serves clients well through cycles.” Financing is one area where J.P. Morgan provides a full menu of competitive options, including margin, swap and repo finance. Cross-asset execution and financing offerings are “aligned as efficiently as possible to deliver holistic views to clients so they are getting the best we can offer.”
Regulatory change is something J.P. Morgan takes in stride. “There are lots of different themes, manifesting in different ways in different locations,” says Heitsenrether, “but the core ideas are simply to better capitalise the financial system, and ensure liquidity is more commensurate with risk.”
Heitsenrether thinks everyone would agree those are credible and right themes – and says that J.P. Morgan is “actively engaged in working through the implications in partnership with regulators.” For instance, the possibility of regulators capping leverage for funds strikes J.P. Morgan as perfectly consistent with regulatory restrictions on leverage elsewhere in the financial system, for banks and brokers. J.P. Morgan already publicly reports average leverage for the funds it primes, and the figure is currently hovering below two times. Hedge funds today are acutely conscious of matching assets to liabilities, both in terms of liquidity and duration, just as banks and brokers are adapting to capital requirements. Limited use of leverage also means that hedge funds should not be much impacted by a normalisation of interest rates – indeed some of them are positioned to profit from such a scenario, she points out.
Asset raising is another area where J.P. Morgan has been readying clients for new regulations, by hosting educational sessions on AIFMD. How the rules impact marketing and capital introduction will “evolve as the rules become clearer,” she says, citing that full guidelines for implementation have not been finalized in all EU member states. The early indications are that some US funds might refrain from actively marketing in the EU and instead rely on reverse solicitation, particularly if the EU is not a major source of capital for their funds.
UCITS is of course one alternative to AIFMD compliance, and J.P. Morgan has a number of UCITS funds on the platform across various strategies. What distinguishes J.P. Morgan is the breadth of offering – the bank has a huge custody franchise, fund administration capabilities, and can also act as a depositary via its trustee unit. All of this helps J.P. Morgan to be at the heart of convergence between the long-only and alternative spaces, with ‘40 Act funds in the US complementing UCITS in Europe.
Reflecting on her quarter-century at J.P. Morgan, Heitsenrether says the effort devoted to women’s career development is “a big part of why I have been here so long,” with “wonderful mentors” inspiring her throughout and plenty of other “down-to-earth people balancing family lives with rich careers.” Heitsenrether wants to do the same for the next generation and says women are not just well represented when J.P. Morgan recruits – the bank also “works very hard to ensure that we can retain women.” She has been involved in the J.P. Morgan Women’s Network since its early days and says colleagues include “plenty of women in senior leadership, with very accomplished and talented women running business lines.”
The work/life balance leaves room for voluntary work as well as families. The philanthropy initiatives within the firm create opportunities for staff to contribute time as well as money. Prime Brokerage team members have led a number of volunteer initiatives, which have included Superstorm Sandy Relief efforts and hosting fundraising events to support breast cancer foundations. Heitsenrether has also been honoured by the YWCA New York Chapter.
• Holds a B.S. in Finance from Fordham University.
• MBA in Finance from New York University’s Stern School of Business.
• Global head of Prime Brokerage at J.P. Morgan Chase.
• Managing Director.
• Recently returned to New York from London, having been Head of Prime Brokerage in EMEA while J.P. Morgan launched their European Prime Brokerage business in 2011.
• Before this was Global Head of Product Development for Prime Brokerage at J.P. Morgan.
• Global Co-Head of Fixed Income Prime Brokerage at J.P. Morgan prior to product development.
• Managing Director at JPMorgan Chase from 1987 onwards.
• Received salutation from YWCA New York as part of the Academy of Women Leaders Class of 2010.
• An active member of the J.P. Morgan Women’s Network.