AINV - JPMorgan deploys big 'chunk of capital' in leveraged loans to take on direct lenders: FT

In an effort to compete with direct lenders, JPMorgan ( NYSE: JPM ) has thrown a "significant chunk of capital" to keep self-funded leveraged loans on its balance sheet, the Financial Times reported Wednesday, citing Kevin Foley, the megabank's head of global debt capital markets, in an interview .

JPMorgan ( JPM ) started making those loans in 2021, though the difference now is that "we want to hold on to it" instead of underwriting leveraged loans and high-yield bonds for syndication, Foley told the FT .

In response to client demand, the bank has formed a new unit dedicated to extending loans to business without an intermediary. “Size hasn’t been a constraint. It’s more the opportunity set. We’re willing to do bigger deals,” Foley added.

The move to cash in on the growing private credit market comes as JPMorgan ( JPM ) seeks to win back market share from direct lenders including KKR ( KKR ), Apollo Investment ( AINV ) Golub Capital ( GBDC ) and Ares Management ( ARES ).

“This is modern-day relationship lending. We have to adjust,” Foley said, ad quoted by the FT . “We have a team of six dedicated to direct lending across banking, markets and commercial banking.”

Towards the end of April, Ares closed $5B in Q1 direct lending origination activity .

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