Bloomberg, December 20, 2023, Big Banks Are Copying From Private Credit’s Playbook
On the surface, it was your run-of-the-mill private credit deal. A bunch of heavy hitters in the industry — Oak Hill Advisors, Antares Capital and Golub Capital — were providing half-a-billion dollars to fund the buyout of an engineering firm. But at the end of the list of lenders was a name that caught the eye — a small, upstart player in the world of direct lending: JPMorgan Chase & Co.
The bank, like almost all its rivals, has spent years watching its leveraged finance desk lose ground to private credit in the business of providing debt to risky companies. Awash with cash, these alternative lenders have been able to offer favorable terms for buyouts and line up larger deals, cutting into what has long been a profit-minting machine for Wall Street’s biggest banks.
Now, the banks are trying a new tack to stanch the bleeding: building out direct lending operations of their own. Citigroup Inc., Barclays Plc and Morgan Stanley are just a few of the firms joining JPMorgan in what suddenly feels like a rush into the business.
