Special credit warning from Dimon
JPMorgan CEO Jamie Dimon stated that he expects problems to arise in the private credit sector, where non-bank, mostly publicly traded asset management and private equity companies are players.
JPMorgan CEO Jamie Dimon stated that he expects problems to arise in the private credit sector, where non-bank, mostly non-public asset management and private equity companies are players, and that major problems may arise, especially when individual investors gain access to this financing.
“Do you want to give individual customers access to some of these less liquid products,” Dimon said at a conference on Wednesday. “Probably yes, but don’t act like there is no risk here.”
The private credit sector, which grew with the provision of loans by non-bank funds and private equity companies, reached a size of 1.7 trillion dollars. Dimon’s cautious approach came after increasing warnings about the sector. Achilles Management Fund Manager Sachin Khajuria stated that “small cracks are observed” as the flow of money into the sector in question accelerates.
Last month, Moody’s downgraded the rating outlook of direct credit funds linked to the world’s largest funds from stable to negative. Moody’s pointed to overdue receivables in this sector as the reason for the rating downgrade.