On July 15, JPMorgan Chase CEO Jamie Dimon sent ripples through the financial world by declaring, “You may have seen peak private credit.” The comment, made during the bank’s second-quarter earnings call, came with a hedge, as Dimon adding “a little bit” at the end. Still, Dimon is one of the most successful bankers in generations, someone Fortune referred to nearly 20 years ago as the “most watched, most discussed, most loved, and most feared banker in the world.” If he’s signaling the peak of a $1.6 trillion asset class, it’s notable.
Private credit refers to loans made by non-bank lenders—such as private-equity firms, asset managers, and hedge funds—directly to companies, and it’s exploded in the decade-plus since the financial crisis. Marquee names in the space have grown growing to titanic proportions: Think KKR, Blackstone, and Ares Management. These players often operate outside of traditional regulatory frameworks in transactions that are too risky or unconventional for traditional banks.
