J.P. Morgan Chase & Co said it expects Japan's beleaguered property market to rebound and will use staff gained from its acquisition of Bear Stearns to develop its real estate securitisation business. "There is a lot of interest in buying real estate right now both from domestic real estate investors and foreign investors," Gregory Guyett, chief executive of J.P. Morgan Securities Japan told Reuters in an interview.
"And those investors will look for financing. That's a business we think can be very attractive." J.P. Morgan gained some 80 employees in Tokyo when it took over troubled Bear Stearns in May, which has led it to expand its small securitisation team to about 25 people, including real estate financing through securitisation.
The securitisation group, headed by a former Bear Sterns employee Rosario Antoci, may expand further depending on market developments. In the wake of the credit crunch, a number of banks in Japan have tightened lending to small and midsized property firms, leading to a string of bankruptcies. But large firms have been relatively unaffected and some like Orix Corp have seen the downturn as an opportunity to go bargain hunting.
Guyett named Fortress Investment Group, Blackstone Group and Mitsubishi Estate Co Ltd as active investors in Japan. J.P. Morgan has also been hiring aggressively to develop its commodities and other businesses, and anticipates overall headcount to increase by about 5 percent over the next year. "You will see us in the early part of next year with a number of senior hires," Guyett said. Recent hires include Hiroki Kazekami from Goldman Sachs Group Inc as head of its global commodities division in Japan.
"Even though commodity prices will fluctuate up and down, it's a major business that our corporate customers and investor customers are interested in," he said. It has hired former senior finance ministry official Yoshiaki Kaneko as a senior advisor to strengthen government and regulatory relationships, and Christopher J. LaFleur as head of government relations and corporate responsibility.
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