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JPMorgan identifies private credit as “important growing space”

Private credit is an “important growing space” within commercial and investment banking, according to a report by Alternative Credit Investor quoting Troy Rohrbaugh, co-chief executive of commercial and investment banking at JPMorgan Chase. 

At JPMorgan’s investor day in New York on Monday, Rohrbaugh said: “Private credit is a very important growing space and we believe we have an advanced strategy across the entire commercial and investment bank.” 

Earlier this year, JPMorgan acknowledged the potential of direct lending in the private credit sector and suggested that the overall private credit market could exceed $3tn (£2.4tn). 

In February, Bloomberg reported that the bank had been in discussions with FS Investments and Octagon Credit Investors to broaden its private credit business. 

Rohrbaugh informed investors that the bank is the largest financier of private credit portfolios and will continue to be a major player in the sector. He also disclosed that the bank has allocated funds to invest in direct loans for corporate borrowers. 

Rohrbaugh added: “We are also developing a co-lending programme to increase the amount of capital we can deploy in the sector. 

“Whether it’s a broad, direct or broadly syndicated loan, we can be truly agnostic to our corporate clients’ borrowing needs.” 

JPMorgan’s chairman and CEO Jamie Dimon affirmed the bank’s renewed focus on private credit. 

Rohrbaugh also shared his perspective that the US Basel III regulation will involve participation in private credit on both sides of the market, through lending and borrowing. 

He stated: “We believe this will not only benefit our clients but also be beneficial to our business. 

“Despite these growth opportunities, we will face capital headwinds given the Basel III endgame, but we anticipate a more measured and manageable rule outcome compared to the original proposal.” 

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