JP Morgan’s Dimon Criticizes US Policies During Earnings Call

JP Morgan’s CEO Jamie Dimon turned a routine earnings call with analysts into a an opportunity for sharp political commentary on Friday.

Reflecting on recent trips to China, Israel, Argentina, and Ireland, Dimon blasted US policies regarding education, infrastructure, and taxes, saying that it was “almost an embarrassment being an American citizen traveling around the world and listening to this stupid s— we have to deal with.”

When a UBS analyst asked about political gridlock being responsible for stunting the US economic growth, Dimon only stated that the US economic growth —which has risen between 1.5% and 2% each year—was indifferent to politics.

However, he did suggest that growth could be “stronger had we made intelligent decisions and we were not gridlocked,” but also took jabs at US government policy compared to the rest of the world.

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“It’s amazing to me that every single one of these countries understands that practical policies that promote business and growth are good for the citizens of these countries for jobs and wages and that somehow, this great American free enterprise system, we no longer get it,” he said.

Moreso than the bank’s financial results, Dimon seemed intent on discussing the country’s social ills. He identified high incarceration levels, opioid deaths, and a failing education system chief among them.

Dimon was also dismissive of the media focus on the day-to-day happenings of financial markets.

“Who cares about fixed income trading in the last two weeks in June?” he said.

Tags: Jamie Dimon, JPMorgan Chase & Co., US Policy

H.I.G. Whitehorse has raised approximately $1.1 billion for a direct lending fund and a loan fund that will invest in companies that need debt funding options, the credit affiliate of H.I.G. Capital reports.

The funds have attracted investment from a variety of institutional investors, including foundations, endowments, public and private pensions, and sovereign wealth funds.

H.I.G. Capital’s direct-lending team has already invested in 12 transactions from the direct-lending fund, according to the firm. Stuart Aronson, H.I.G. Capital’s head of US direct lending, noted, “The next several years will present a compelling opportunity to partner with non-sponsor and sponsor- owned companies in need of debt capital solutions. We look forward to capitalizing on the firm’s synergistic platform and strong deal sourcing network with originators located in nine cities across the US.”

The funds are looking to provide senior secured-financing solutions, mostly through “non-sponsored” loans, to US “lower middle-market” companies that are “non-sponsor” and “sponsor-owned.” The financing is not targeted at any specific industry.

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Middle-market companies that direct lenders target generally produce EBITDA earnings of $10 million to $75 million on revenues ranging from $100 million to $300 million, according to James Meisner, Commonfund’s head of fixed income, and Vincent Kravec, director. They estimate the size of the “middle market” at about $4 trillion.

Nonbank lenders have been attracted to this space as a result of a vacuum left by the departure of banks that face more stringent regulatory guidelines following the financial crisis of 2007 through 2009. Direct lending presents an opportunity for nonbanks to capture a higher return in today’s low-interest-rate environment. One basis for the higher return is the “liquidity premium” that investors get for investing in debt that is not very liquid and easily convertible into cash.

Direct lending investments also typically make income distributions at periodic intervals, have a floating interest-rate tied to LIBOR, and provide a yield in the 8% to 12% range.

Tags: Debt, H.I.G. Whitehorse, investing, Pensions