(New throughout, adds comments and background)
By Anna Louie Sussman
NEW YORK, April 2 Blythe Masters, one of Wall
Street's most powerful women, is leaving JPMorgan Chase & Co.
after a 27-year career that began with an internship in
London and concludes with the sale of the multibillion-dollar
commodities business she built.
Masters, who turned 45 in March, will leave the bank in a
few months after assisting with the sale of its physical energy
and metals business to Swiss merchant Mercuria.
She will take time off and "consider future opportunities,"
according to a memo bank executives sent to employees on
A Cambridge graduate and avid equestrian, Masters was part
of a team that pioneered structured finance instruments in the
After a decade in trading and corporate roles, she took over
the fledging commodities business in 2007. She embarked on a
series of acquisitions built Wall Street's biggest commodities
desk with revenue exceeding $2 billion in 2012.
Her career hit a few road bumps in recent years. Some
criticized her role in developing credit products that fueled
the U.S. housing bubble that burst in the financial crisis of
2008. Last year, she got caught up in a regulatory inquiry that
ultimately cost the bank more than $400 million.
Her exit comes at a time when commodities earnings have been
shrinking across the financial sector.
Colleagues called her smart and competitive, respected by
senior executives and valued by CEO Jamie Dimon. But she could
be a divisive figure, demanding and combative at times,
according to interviews with people who have worked for her.
One colleague called Masters "brilliant" and "inventive",
but said a corporate management role was not an ideal fit for
her. Many expect her to enter a less-regulated area such as
private equity or hedge fund management.
"A number of the large private equity houses are on the
prowl to add commodity trading to their suite of investor
products," said George Stein, managing director of New
York-based recruiting firm Commodity Talent LLC.
"A professional like Blythe Masters who built the largest
Wall Street commodity trading house by revenue is going to find
serious interest among the biggest players."
Her ex-boss Michael Cavanagh, formerly co-head of JPMorgan's
corporate and investment bank, left at the end of March to
become co-president and co-chief operating officer at private
equity firm Carlyle Group.
Masters started at JPMorgan as an intern in London, then
entered Cambridge University to study economics. She joined the
commodities desk in 1991 after graduating, and later moved to
the derivatives desk, where she was considered a wunderkind.
In 2006, after several years as chief financial officer of
the investment bank, Masters became interim head of the
The bank had been a sizeable player in commodities in the
1990s, with a global oil trading division led at the time by
Masters' then-husband, Danny Masters. But it had not delved as
deeply into the sector as investment banks Goldman Sachs
and Morgan Stanley, and had scaled back after facing
regulatory scrutiny in metals markets.
That changed in March 2008, when the acquisition of Bear
Stearns gave the bank a large physical power and gas business.
"The idea that commodities as an asset class is finished is
just fundamentally flawed," Masters said in a 2008 interview
With Masters at the helm, JPMorgan bought parts of UBS's
commodity business after the Swiss bank decided to get
out of the sector. The 2010 purchase of physically focused RBS
Sempra was the jewel in JPMorgan's commodities crown.
By August 2010, Masters was telling employees that Goldman
and Morgan Stanley should be "scared" of JPMorgan's
newly-expanded commodity operation, Bloomberg reported at the
More recently, regulatory problems began to pile up. In
2013, the bank paid $410 million to the Federal Energy
Regulatory Commission to settle allegations of power market
manipulation in California.
While Masters was not cited for wrongdoing, her name
appeared in the regulator's order a number of times. A
confidential 70-page regulatory document cited her supposed
"knowledge and approval of schemes" carried out by a group of
energy traders in Houston, and claimed that Masters had
"falsely" denied under oath her awareness of the problems, the
New York Times reported in May 2013. The bank neither admitted
nor denied any violations in the case.
In July 2013, the bank's ownership of its Henry Bath metals
warehousing unit came under scrutiny at a Senate Banking
Regulators have been turning a sharper eye on all of Wall
Street's involvement in the raw materials supply chain, with the
Federal Reserve questioning whether commercial banks like
JPMorgan should be allowed to trade physical commodities.
Commodities trading, once a blockbuster business, has been
shrinking. Total commodity trading revenues on Wall Street have
fallen by about two-thirds in the last five years, with the top
10 banks notching just $4.5 billion last year, according to a
report by Coalition, a UK financial analytics firm.
That is down from more than $14 billion at its peak in 2008,
when bumper returns at sector stalwarts Goldman and Morgan
Stanley encouraged other banks to expand into energy and metals
(Additional reporting by David Henry and Jeanine Prezioso in
New York, David Sheppard in London; Editing by James Dalgleish
and David Gregorio)