Reportedly, JPMorgan is seeking to grow its private credit business.

JPMorgan Chase is making moves to expand its presence in the private credit market, aiming to strengthen its $3.6 trillion asset management business. According to a report by Bloomberg News, the banking giant has already set aside over $10 billion for direct lending and is forming partnerships with asset managers for private credit deals.

While discussions were held to acquire Chicago-based Monroe Capital, both parties ultimately decided to walk away. JPMorgan’s asset management arm, which oversees money for pension funds and wealthy individuals, is looking to enhance its private credit offerings. At the end of last year, the business managed $17 billion in private credit assets, slightly less than Monroe’s $19 billion as of April 1.

In his annual letter to shareholders, JPMorgan CEO Jamie Dimon highlighted the growing competition from private markets and fintech companies, which operate with less transparency and regulatory constraints than traditional banks. Dimon pointed out the example of tech giant Apple, which effectively functions as a bank by handling money transactions.

Federal Reserve Governor Lisa Cook also expressed concerns about the rapid growth of private credit funds and their potential for excessive risk-taking. Cook emphasized the need to monitor the interconnectedness between private credit and the broader financial system to ensure stability.

As JPMorgan continues to navigate the evolving landscape of private credit, the financial industry will be closely watching its strategic moves and the impact on the market.