JPMorgan Chase & Co. (JPM)’s Chief Investment Officer Ina R. Drew, head of the unit responsible for a $2 billion trading loss, built a 30-year career at the largest U.S. bank by embracing risk and avoiding the spotlight.
“With everything she does, she thinks in terms of trading,” said Stephen Murray, head of CCMP Capital Advisors LLC, created from a JPMorgan private-equity unit in 2006. “There are risk-lovers, there are risk-haters, and the best traders will take the risk as long as they get paid for it.”
Drew’s operation, which helps manage the bank’s risk, has been transformed under Chief Executive Officer Jamie Dimon to make bigger speculative bets with the firm’s own money, according to five former employees, Bloomberg News reported last month. Some bets were so big JPMorgan probably couldn’t unwind them without roiling markets, the former executives said.
The loss disclosed yesterday came after an “egregious” investment-office failure tied to credit derivatives, Dimon said in a conference call. “In hindsight, the new strategy was flawed, complex, poorly reviewed, poorly executed and poorly monitored.”
Drew, 55, is one of two women who sit on the New York-based firm’s operating committee. Her office oversees about $360 billion, the difference between money from deposits and what the bank extends in loans. Dimon, 56, had pushed the unit to boost profit by buying higher-yielding assets, including structured credit, equities and derivatives, two former employees have said. The shift to riskier bets underscores how blurry the line can be between so-called proprietary trading and what banks say is hedging.
Drew has overseen both kinds at the firm for decades. She joined Chemical Banking Corp. in 1982 after graduating from Johns Hopkins University in Baltimore and receiving a master’s degree from Columbia University’s School of International Affairs, according to the bank.
When Chemical merged with Manufacturers Hanover Corp. in 1991, Drew was put in charge of managing U.S. interest-rate risks and given oversight of discretionary trading positions, according to a news release that year.
“Ina was all about risk-taking,” said Mark Schneiderman, a former human resources manager at Chemical. “She was scary- smart, she was very determined, she was very low-key compared to the crazies that you find on a trading floor — but very, very determined.”
Petros Sabatacakis, a former chief risk officer for Citigroup Inc. and now a director of the National Bank of Greece SA, said he promoted her at Chemical…