JP Morgan Asset Management is expecting investors to exit their investments in private credit funds at a record pace this year as they look for liquidity, boosting the nascent secondary market in the process, according to a report by Bloomberg.
The report quotes Andrew Carter, who oversees JP Morgan’s credit secondaries strategy, as saying in an interview that more than $30bn of private credit is expected to change hands in 2024, up from as little as as $3bn in 2019, as insurance and pension firms look to offload some of their illiquid positions in the $1.6tn private credit market. As they do so, big players including Apollo Global Management, Ares Management and Tikehau Capital are expected to step in to acquire those secondary stakes.
“Today, deal flow is again being driven by liquidity needs given the slowdown in cash flows created by debt repayments, which has resulted from decreased M&A and capital markets activity,” Carter said.
