Gist
- JPMorgan Chase is rapidly building out its Business Services Investment Banking (IB) division by hiring three senior bankers from Deutsche Bank and Goldman Sachs and targeting $500 million in revenue over the next 3–5 years. [1]
- The hires—Erik Carneal, David Sweet, Ye Xia—bring sector-specific strength in commercial, industrial, residential, and professional services, with each positioned to deepen JPMorgan’s market coverage and private equity relationships. [1]
- The strategy prioritizes segments seen as resilient—business services like HVAC, landscaping, janitorial—and less exposed to tariffs or AI-driven disruption; consolidation via private equity is identified as a key growth driver. [1]
- John Richert, currently JPMorgan’s head of mid-cap IB, is positioning to become global head of business services upon the upcoming retirement of current leader Dana Weinstein, aligning leadership to this expansion. [1]
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JPMorgan’s move to aggressively scale its business services group represents a strategic bet on sectors with recurring revenue, low disruption risk, and robust private equity interest. By targeting $500 million in revenue—≈5× current levels implied—over 3–5 years, the firm aims to replicate its mid-cap IB transformation, which scaled from ~$150 million to over $1 billion in annual revenue under Richert’s leadership in seven years. [1]
The hiring of Carneal, Sweet, and Xia adds both depth and breadth. Carneal brings more than 25 years in industrial, professional, commercial, and education services, positioning him to build veteran-level coverage and mentor juniors. Sweet adds commercial and residential services strength, while Xia brings experience across industrial/commercial services and professional services from prior roles at Goldman, Guggenheim, and Rothschild. These hires signal JPMorgan’s intention to cover both mid- and large-cap mandates in business services aggressively. [1]
Strategically, business services as a sector is attractive for several reasons: high employment (22.5 million in the U.S.), low exposure to global trade/tariff disruption, limited risk from initial wave of AI automation, and significant recurring/replacement service demand. Outsourcing of non-core operations like landscaping or janitorial is ripe for roll-ups. JPMorgan plans to leverage its commercial banking relationships with ~11,000 mid-cap clients as a source of deal flow. [1]
Operationally, expanding senior-level headcount by a factor of five within two to three years will require investment in talent acquisition and retention, deal execution capacity, and integration of new hires into formal leadership paths. The upcoming transition—Richert becoming global head—will be a pivotal moment. The firm will need to balance quality versus quantity, particularly in underwriting risk, valuation discipline, and maintaining coverage continuity.
There are open questions and risks: whether $500 million is realistically attainable given market competition; whether the business services sector remains shielded from AI or regulatory headwinds; attrition risks at rival banks like Goldman; and whether mid-cap fees will remain high enough amid economic uncertainty. Also, execution matters: private equity inflows could slow, service margin pressures may rise, and the ability to scale without diluting deal quality will be tested.
Supporting Notes
- JPMorgan plans to “quintuple the business services group’s revenue to $500 million over the next three to five years.” [1]
- Richert intends to “increase headcount in senior level by five times in the next two to three years. I will call it the power of fives.” [1]
- New hires: Erik Carneal (vice chair from Deutsche Bank), with 14 years at DB and 25+ years in IB; David Sweet (managing director, mid-/large-cap clients) formerly head of commercial & residential services at DB; Ye Xia (executive director) from Goldman Sachs, with previous roles at Guggenheim & Rothschild & Co. [1]
- The business services sector in the U.S. employs ~22.5 million people, including those in HVAC, janitorial, landscaping, etc., and firms in these sub-sectors are increasingly outsourced, consolidated for recurring revenue. [1]
- Private equity deals in business services saw record cash availability—$310 billion in deals—during Q3, with multiple PE firms asking JPMorgan to show opportunities in HVAC, restoration, landscaping. [1]
- JPMorgan will leverage its commercial banking relationships with ~11,000 mid-cap companies to generate investment banking activity including M&A. [1]
- John Richert currently heads mid-cap IB; Dana Weinstein leads business services and will retire next year, at which point Richert will take over as global head. [1]
- Business services are viewed as largely shielded from tariffs and AI-driven job displacement; example: despite tariffs affecting manufacturers, cleaning services for facilities still needed. [1]
Sources
- [1] www.reuters.com (Reuters) — 2025-10-24