People with knowledge of the matter claim that JPMorgan Chase & Co. is in negotiations to secure $2.5 billion to $3 billion in third-party commitments in order to expand its private credit strategy.
In an effort to raise capital, the New York-based lender has targeted alternative asset managers, sovereign wealth funds, pension funds, and endowments, among others. According to sources, credit managers who already invest in corporate debt but have restricted access to private transaction flow are the most interested in it.
Details may still change as discussions with investors continue, according to the individuals, who requested anonymity while discussing a private transaction. They stated that terms might be finalized in the future weeks.
A number of deep-pocketed investors have reportedly given the largest US bank a lukewarm reception as it seeks to supplement the more than $10 billion in balance sheet capital it has set aside for private credit transactions, according to sources with knowledge of the situation. According to the sources, the reluctance of certain investors derived from the fact that JPMorgan would be balancing the interests of itself, its partners, and borrowers, rather than having a fiduciary duty.
Bloomberg reported in December that significant established private credit investors have shown little interest in the initiative due to concerns regarding fees and control.
According to the sources, JPMorgan intends to generate loans, retain a small portion of each financing, and syndicate the remaining debt to its partners. A minimum of $500 million in commitments from investors are being sought by the bank, according to one of the individuals included.
An investor has shown considerable interest in JPMorgan’s private credit strategy, especially in recent weeks, according to a JPMorgan representative.
