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Blythe Masters

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66
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2024-03-25
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2024-03-25
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1
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podcast

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  1. “Mean for your clients? What does this mean for your reputation? The notion that a reputation can take decades or even centuries to develop and can be destroyed in a minute. These are the notions that I think I absorbed over many years and I think really are a big part of the reason why JP Morgan is what it is today.”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Over the course of being trained over many decades as a banker, it was those two things that I think are most ingrained. And they're small sentences, but they're big concepts. They describe a cultural orientation and a way of doing business and a way of looking after the consequences of doing business and the responsibility that you have for that. Those things were super, super emphasized at every possible opportunity by the leadership of the bank and it began before Jamie, to be fair, but he certainly, I think took it up a notch. He's saying, what is a fortress balance sheet mean? Obviously, you have to trade things off, doing no business at all is pointless, but it has many dimensions relates to liquidity and capital and stress testing and thinking about crowded trades and wrong way risks and what is the herd doing and is it safe to follow the herd today or is it dangerous and just because everyone else is doing something does that mean you should be doing it it means what is”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Things called wrong way risks, things that correlate with each other in the worst way at the worst time, and getting sophisticated about the tools to manage those, all of that, combined with what I think, frankly, was just a great judgment call on the part of Jamie and the executive management team at JPMorgan later in 2006 and 2007 in avoiding the subprime home equity allure, the trap. Super extraordinary volumes of activity in that space by many people that were eroding JP Morgan's market share, but we stayed out of that because of the lessons we learned from that prior period and because Jamie and others had a very early negative view on the risks in that space. There are two phrases that if you scratch a long time JPMorgan person, they'll come out with is that the mantra is you run a fortress balance sheet, you seek to do first class business and that in a first class way. And if I learn two things.”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Happened at the time of 2001, which was when the first wave of the dot-com bubble burst and there was the meltdown. And others' significant sell off in high yields credit markets and private equity, which until that point had been thought to be diversifying of each other. They proved definitely not to be. JP Morgan did not come out of 2001 Cove in Glory. JP Morgan came out of 2001 very much at the bottom of the pack. And the reason for that had to do with the extent of the retained credit positions in leverage and high yield credits and associated private equity exposures as well. I assumed the role as head of global credit portfolio management in 2001 more or less exactly with Enron and WorldCom and all these things unfolding around us. And it was the lessons that we took from that which had to do with being much more cautious about retained exposure in the portfolio, much more proactive in the use of instruments like securitization, like credit derivatives to manage down, retain credit exposures, much more focus on”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “That was a very interesting question. And to put that in context, when I joined Morgan Guarantee, which 87, it was still a triple A rated institution. I think it had about 12,000 people globally. So compare that to the Beginnoth than it is today. It's an extraordinary period of change. And I stayed with the firm for in total 27 years, so it was unrecognizable by the end. And you're right that during that time, there were many cycles that came and went. There were many crises, specific individual events, as well as broader market cataclysms, obviously 2008 being. The most significant of those, but interestingly, I think the first that I... Was really in a position where I was senior enough to have any perspective. Really learn from it was.”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Of duty in risk and control functions. I looked after global credit portfolio that manages all of the loans and counterparty exposure from derivatives that the bank retains. In the era after Jamie. The firm with the combination with Bank One became the CFO of the Google Investment Bank, working for then CEOs, Bill Winters and Steve Black. In the aftermath of the great financial crisis, there was a wave of re-regulation and changed regulation. And I acted as. Head of regulatory affairs for the investment bank while doing my day job in commodities in order to help navigate all of that change.”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “When I graduated and joined full time, I joined the Global Commodity Derivative Group, which consisted, I think, of about four people and me. I was the only girl or woman. The bank had been in the business of bullion and related precious metals for many decades, but this was the beginning of our work in providing hedging instruments in things like jet fuel and oil and other energy related products. Over the course of many years, I spent a lot of time in and around the derivative markets, almost all of them, for rates, credit, commodities, environmental commodities, and built and ran what became big franchise markets businesses for the firm, the structured credit business in the 90s. I then moved back into commodities in the 2000s and built out the physical as well as the derivative business in commodities. And I also did”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “What's more interesting is whether they put me with no experience on day one, and the answer to that was the photocopy machine. Because remember, this is pre-email, pre-networked computers and photocopying was a big part of life. Selected that for a while, then they realized that I actually could read the contents of the documents I was photocopying and I started working on the confirmations of derivatives and the accounting for and valuation of derivatives. In 1987, derivatives were very new. The first swaps, I think, were executed maybe 83, something like that, still a very novel concept and they were accrual accounted for. And so the shift from accrual accounting to market to market accounting, which sounds pretty arcane, but in banking accounting terms, it was a seismic shift and produced some very large swings on the income statement. So it needed forensic analysis. And so I got taught how to value and structure and mark to market swaps at the age.”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “In 1987, when I was 12 Maybe I finished school and I took a gap year, which was common between high school and university. And I needed to earn some money and I wanted to travel. And so I wrote cold, cool letters to a number of banks in the city of London. And at that time, I didn't really know the difference between a commercial bank or an investment bank or merchant bank. I got two job offers as a result of these letters, one of whom was from continental Illinois. They died in ignominious death not very long afterwards. The other was Morgan guarantee limited, which was the predecessor to what is today JP Morgan. And I first worked for JPMorgan when I was still a teenager before I went to university. Did a gap year and then every year thereafter while I was at university, I came back and did summer internships. And so in 91, when I graduated with a degree in economics from Cambridge, I joined JPMorgan permanently. It was a foregone conclusion.”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Yes. Well, my Call to action is to join the movement by embracing this idea of 30 seconds of bravery. It's to buy a kid a book or donate a book and more information can be found on our website, which is 30 seconds of bravery.org. And to be brave yourself and share the knowledge that you have about the investment industry with that next generation or with people who don't know as much as you do. There are lots of ways to be brave and to lift others up. Be your time, talent, or treasure But I really encourage you to get involved. My ultimate goal is to give the book away. So I've purchased $2,500 to give to nonprofits and children who really need this education. And any profits that we make on book sales will be recycled into giving more books away.”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “It's tied into the book because you can't be brave without doing something that you're scared of. You can't be brave without being scared. And so how many times have any of us felt scared to do something or take a risk or be uncomfortable and decided not to do that thing? So one thing that I guide people earlier on in their career is just do the hard thing for 30 seconds. It doesn't need to be an entire day or a lifetime of doing the hard thing. Just ask for the promotion, ask for the raise, make the change, whether it's in your personal life or professional. And I guarantee you it'll change the path of your life that 30 seconds. So I can count to about three or four examples in my life where it's changed.”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Well, it's been really heartening because I've put this message out. That message into the world asked a few people if they would support it, and they jumped in right in with both feet. And so we have some amazing endorsers, including yours truly, Ted. We have famous former poker player, Annie Duke. We have the professional sports community. So Alex Rodriguez And John Jones from the New England Patriots, and Kyle Arrington, who's a Super Bowl champ, and Powerhouses, Industry Powerhouses like Nasdaq. So this has been really heartening.”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “She bought her trade the next morning and said, Mama, I'm going to make my own lunch today. I'm an investor now. And I saw that these children really are primed and hungry for this type of information, but financial literacy is not something that's widely required at public schools. It really needs to be done at home, and it's not always.”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Really wasn't setting me up for success in the investment industry, but here I am today, a partner overseeing over one and a half trillion dollars in capital. And I really believe that other children should have the opportunity to have this life-changing experience of learning about money and entering the investment industry. The turning point in my career was about 18 months into my career when I realized that the woman who I had admired named Gene Hines, who was a very talented investor who commanded the room, who was young, who was super successful, she started as an administrative assistant as well. The light bulb went off. I believe that I could. I had tangible role model that I could follow, and I went and got education. So that's what this book is trying to do. taught my two daughters earlier last year how to invest. We did stock research together. They entered their own trades. And my six-year-old came down after”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “So I really shouldn't be successful in this industry. The odds were not in my favor. I came from a family that had generations long cycles of making ends meet and really a corroding thread of fear handed down for hundreds of years. We didn't have any ins. We didn't have any connections, very little in the way of financial education. I started my career as an administrative assistant at Wellington Management Company. I was a state school kid with a German degree. And so by all measures.”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “I guess on today's show is Blythe Masters, founding partner of Motive Partners, a $6 billion specialist private equity platform that builds, backs, and buys technology companies that enable the financial services industry. Live spent 27 years at JPMorgan, starting as a teenager and rising to the firmwide executive committee. Her path included roles as the head of global commodities, head of corporate and investment bank regulatory affairs, CFO of the investment bank, head of the global credit portfolio and credit policy and strategy, and head of structured credit. Our conversation covers Blythe's career trajectory at JPMorgan across asset classes, cycles, and crises. We then turn to the investment model at Motive and themes in asset and wealth management. We recorded this conversation on the iConnections Global Alts”

    2024-03-25 · Capital Allocators · Blythe Masters - Fintech Innovation at Motive Partners (EP.376) · IDENTIFIED FROM THE TRANSCRIPT · source