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JPMorgan ( JPM ) plans to expand division by 5 times in 3-5 years

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Sector which employs 22 million people is under

consolidation

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Industry is seen as shielded from AI, tariffs

By Sabrina Valle

NEW YORK, Oct 24 (Reuters) - JPMorgan Chase & Co ( JPM )

has poached three senior investment bankers from Deutsche Bank

and Goldman Sachs to expand the M&A team that caters to the

business services sector - and isn't done yet - in a push to

dramatically increase fee revenue, a top banker told Reuters.

John Richert, JPMorgan's ( JPM ) head of the firm's mid-cap

investment banking, says he hopes to quintuple the business

services group's revenue to $500 million over the next three to

five years. Hiring, he says, should follow the same pace.

"I'd like to increase headcount in senior level by five

times in the next two to three years. I will call it the power

of fives," he said, declining to detail his goals for managing

directors.

Business services employ 22.5 million people in the U.S.

from electricians to plumbers and office catering. The sector

that used to be dominated by mom-and-pop businesses is

undergoing a consolidation, as companies are increasingly

outsourcing non-core functions like HVAC, janitorial, and

landscaping to reduce costs and improve efficiency.

SHIELDED FROM AI

The bank wants to capitalize on a sector largely insulated

from tariffs and the threat of AI-driven job substitution.

"Even if you are a clothing manufacturer impacted by

tariffs, somebody still has to clean that facility at night," he

said.

Cash availability from private equity firms - which reached

an all-time quarterly high of $310 billion in deals in the third

quarter - is stimulating deals. These industries, often

dominated by small operators, are attracting private equity

firms eager to roll up small and regional players into scalable

platforms that provide recurring, steady revenue.

"We have a number of private equity meetings per week in

which investors are asking to show them everything we have in

HVAC, everything we have in restoration, in landscaping," he

said.

JPMorgan ( JPM ) plans to leverage its relationships with the 11,000

mid-cap companies served by its commercial banking arm to drive

M&A activity.

Richert wants to replicate in Business Services his growth

strategy for the Mid-Cap IB division, which has grown from a

30-person team to 250 bankers and from $150 million to over $1

billion in annual revenue since he took the role seven years

ago.

Erik Carneal will join as vice chair after 14 years at

Deutsche Bank, where he advised on deals across professional,

education and commercial services and developed relationships

with management teams, boards and financial sponsors. Carneal,

who has more than 25 years of investment banking experience,

will also help to develop and mentor younger bankers.

David Sweet, previously head of commercial and residential

services coverage at Deutsche Bank, will join as managing

director focusing on mid- and large-cap clients in that

subsector. He has nearly 20 years of experience supporting

clients in the sector.

Ye Xia will join as executive director to expand coverage of

industrial and commercial services, digital infrastructure and

professional services. Xia most recently worked at Goldman

Sachs, where she looked after industrial and commercial services

clients, and has held roles at Guggenheim and Rothschild & Co.

The hires follow JPMorgan's ( JPM ) addition of Jonathan Slaughter

as vice chair in Business Services in London earlier this year.

Carneal, Sweet and Xia will be based in New York and report

to Richert. Dana Weinstein leads business services, and Richert

will assume the role of global head of business services

investment banking coverage upon her retirement next year.

Carneal, Sweet and Xia will be based in New York and report

to Richert. Dana Weinstein leads business services, and Richert

will assume the role of global head of business services

investment banking coverage upon her retirement next year.