Has Private Credit Peaked? Dimon Warns It May Have.

New York Times

4 days ago

Andrew here. I made a cameo at the live taping of the 'Acquired' podcast at Radio City Music Hall on Tuesday, where Jamie Dimon of JPMorgan Chase was quizzed about his remarkable history at the banking giant. But what you should pay attention to are the comments Dimon made about the stock market — 'asset prices are rather high,' he said — and his concerns about private credit. More on that below.
We're also taking a look at what Tuesday's data on consumer prices means for the Fed, at Zohran Mamdani's meeting with top New York C.E.O.s and at the crypto industry's continued relief from Washington.
JPMorgan's private-credit worries
JPMorgan Chase's C.E.O., Jamie Dimon, has been fairly consistently skeptical when it comes to private credit, the nontraditional and less-regulated lending business that has been among Wall Street's hottest activities in recent years.
He kept up that concern on Tuesday, warning that such lending might be set for a decline. But he wouldn't completely shut the door on buying a provider of such loans as part of an effort to get back into the sector.
'You may have seen peak private credit,' Dimon told analysts on JPMorgan's earnings call with analysts on Tuesday, with the caveat, 'I don't know that.' When pressed by Mike Mayo, a banking analyst at Wells Fargo, he added: 'Well, I've mentioned that credit spreads are very low. It's grown dramatically over time, and you have to pay up a lot for it.'
In other words, private-credit firms are currently accepting relatively little return in exchange for taking on risk, and the industry has grown significantly in the past several years. At a taping of the 'Acquired' podcast at Radio City Music Hall later in the day, Dimon called private credit 'one place that people worry has unknown leverage.'
Want all of The Times? Subscribe.