JPMorgan Chase, the most pessimistic about private equity lending, is expanding its private equity lending business. Bloomberg reported two days ago that JPMorgan Asset Management has officially launched a private equity credit expansion plan, raising billions of dollars in start-up capital through institutional investor financing, and then injecting commercial bank loan origins into it, with the goal of gradually reaching a scale of tens of billions of dollars. You should know Jamie, CEO of JPMorgan Chase Before that, Damon was the Wall Street tycoon who was most pessimistic about private equity credit. Especially at the end of last year, his "cockroach theory" influenced the judgment of many people. So the launch of JPMorgan Asset Management's private credit expansion plan this time is even more worthy of attention. 1. Historical background The huge regret of selling HPS in 2016 was the most direct trigger. In 2016, JPMorgan divested some of its direct lending business and established an independent company called HPS Investment Partners. HPS has now become a private equity credit giant with a management scale of billions of dollars, making a fortune in the wave of the private equity credit market surging from 250 billion dollars to 23 trillion dollars in the past 10 years. JPMorgan executives later publicly expressed "regret" for this decision multiple times, believing that they missed the industry's largest growth window. 2. Core advantages JPMorgan Chase believes in utilizing commercial bank loan channels to achieve "low-cost, high synergy" scale expansion The commercial banking department is responsible for sourcing and originating loans, while the asset management department "looks and takes bites". This is not simply external fundraising, but injecting the huge loan resources of banking groups into private credit funds. JPMorgan Chase has the largest corporate client network and due diligence capabilities in the United States, providing access to high-quality, exclusive trading opportunities at a much lower cost than external funds. JPMorgan Chase has reserved over $50 billion in balance sheet capacity in its commercial and investment banking departments for direct loans, and has also enlisted joint lending partners to provide more funding. 3. The best time In the first half of the year 26, the private credit market did face pressure: investor outflows, tight liquidity, some loan valuations being lowered, and regulatory scrutiny being strengthened (SEC, Federal Reserve focus on leverage and valuation). But JPMorgan believes this is a structural opportunity: 1) Traditional banks have been continuously shrinking their credit supply due to Basel III and interest rate environment, and private equity credit naturally fills the gap. 2. Institutions (pension funds, sovereign funds, insurance companies) still strongly require high-yield assets. 3) Competitors are under pressure, and JPM can use internal resources to counter the trend and acquire high-quality assets. Of course, the core is still profit driven Private equity lending is currently one of the most popular alternative assets among institutional investors, with yields typically 300-500bp higher than public lending and management fees much higher than traditional stock/bond funds. JPMorgan Asset Management hopes to significantly increase the proportion of high profit alternative investments, which has been a common strategy of Wall Street giants over the past 5-10 years (BlackRock, Morgan Stanley, Goldman Sachs are all heavily invested). JPMorgan's move is a strategic expansion of its asset management business in the private lending field, essentially a combination of "regretting past mistakes, leveraging the synergies of the banking group, and seizing the high profit track" Transforming the origin advantage of banking groups into a moat for asset management business, achieving a reversal from "missing HPS" to "building the next HPS", and ultimately seizing a larger share of the trillion dollar private credit market. This sounds a bit like 'you guys can't do it well, let me make a sample'. This article is sponsored by @ bitget_zh, titled 'Bitget Buying US Stocks: Instant Entry, Smooth Trading'