JP Morgan’s investment banking unit is so massive it has become almost synonymous with record-breaking financings. But a new initiative is expanding the bank’s coverage to include a segment of the market often overlooked by the largest institutions on the street: small-cap deals.

This past July — just months after the firm’s bankers led the financing for Electronic Arts, the largest buyout in history — JP Morgan announced an expansion of its middle market team to focus on transactions valued at between $100m and $500m.

The team has grown since. Yesterday morning (27 October), JP Morgan announced the addition of four managing directors to the small-cap team, bringing head count to 12 bankers.

The small-cap space has for years had its own ecosystem: specialized investment banks, small sponsors and direct lenders fueled growth while their larger counterparts focused on transactions with bigger price tags. Recent years, however, have brought a slowdown in M&A, especially in the sponsor market, and industry players are looking down-market at opportunities to deploy capital.

In this episode of Cloud 9fin, JP Morgan’s Michael Flynn, the new head of the small-cap investment banking team, talks with 9fin’s Tom Quinn about why we are seeing such growth in the space now, the role of the bank’s direct lending arm in small cap advisory work and issues founders face that are unique to the smaller market.

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Unpacking JP Morgan’s lower middle market push

Cloud 9fin

Unpacking JP Morgan’s lower middle market push