JPMorgan Chase & Co is joining forces with Cliffwater, FS Investments, and Shenkman Capital Management Inc to increase its footprint in the booming $1.7tn private credit market, according to a report by Bloomberg, citing unnamed sources familiar with the matter.
Under the terms of the new partnership agreements, JPMorgan will originate loans and co-invest alongside the direct lenders, who will have limited opportunities to opt out of transactions during a specified timeframe, according to Bloomberg’s sources.
While representatives from JPMorgan, Cliffwater, and Shenkman declined to comment on the partnership, a spokesperson from FS Investments confirmed the firm’s participation.
Other banks are making similar moves – Citigroup recently announced a partnership with Apollo Global Management for $25bn worth of deals over the next five years, while Wells Fargo joined forces with Centerbridge Partners last year to establish a direct-lending fund. Barclays has also teamed up with AGL Credit Management to originate private loans.
JPMorgan, a major player in underwriting bonds and loans for lower-rated companies, has been actively exploring collaborations with private credit firms since late 2023. The bank has already allocated more than $10bn from its balance sheet to support its venture into the private credit space, as previously reported by Bloomberg.
