JPMorgan sees growth opportunity in private credit
JPMorgan has identified private credit as a key growth area in commercial and investment banking.
During JPMorgan Chase’s investor day on 20 May in New York, Troy Rohrbaugh, co-chief executive of commercial and investment banking, said that the bank sees many opportunities for growth in individual clients segments and products such as private credit.
“Private credit is a very important growing space and we believe we have an advanced strategy across the entire commercial and investment bank,” he said.
“We believe we are uniquely positioned to be an important part of all aspects of the ecosystem.”
Read more: JPMorgan bullish on direct lending, puts $3tn value on private credit market
JPMorgan has been bullish on private credit for some time now. Earlier this year, the private bank praised the potential of direct lending in the private credit sector and suggested that the overall private credit market could be worth more than $3tn (£2.4tn).
It has also been reported that the bank has been in talks with FS Investments and Octagon Credit Investors to expand its private credit business.
Rohrbaugh told investors that the bank is the largest financier of private credit portfolios and will remain a significant player in the space. He also revealed that the bank has set aside money to invest in direct loans for corporate borrowers.
Read more: Private debt AUM passed $1.6trn last year amid “explosive” growth
“We are also developing a co-lending programme to enhance the amount of capital we can put to work in the space,” said Rohrbaugh. “So whether it’s a broad, direct or broadly syndicated loan, we can be truly agnostic to our corporate clients’ borrowing needs.”
Jamie Dimon, chairman and chief executive of JPMorgan Chase, confirmed the bank’s new focus on private credit.
Rohrbaugh also shared his view that the US Basel III regulation will involve participating in private credit on both sides of the market by lending and borrowing.
“We believe this will not only benefit our clients, but certainly be beneficial to our business,” said Rohrbaugh.
“Against all these growth opportunities we will have capital headwinds given the Basel III endgame, but we are anticipating a more measured and manageable rule outcome versus the original proposal.”
Read more: JPMorgan in talks to expand its private credit business