Making Sense Private credit branches out
Jun 10, 2025
Jake Pollack, head of North America Credit Trading & Global Credit Financing at J.P. Morgan, shares insights on the evolving private credit market. He discusses the impact of economic uncertainty on private credit strategies and the growth of diverse asset classes. Pollack highlights the resilience of private credit amidst market volatility and explains the benefits of co-lending strategies. The conversation also delves into the emergence of private credit collateralized loan obligations and the complexity of navigating this dynamic financial landscape.
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M&A And Tariffs Shape Credit Creation
- M&A activity is a key driver for both private and public credit and has been below expectations for 24–36 months.
- Tariff uncertainty has stalled corporate activity and increased portfolio scrutiny by lenders.
Stress Could Hit Both Public And Private Credit
- Private and public credit will both see rising stress if the economy weakens, with mixed reasons one might outperform the other.
- Private credit has sector concentration, tighter docs, simpler capital structures, and lots of dry powder that can support stressed deals.
Definition Risk As Private Credit Expands
- 'Private credit' has broadened beyond core middle-market, first-lien lending into tranches and mezzanine, raising definitional risk.
- The more junior or esoteric the tranche, the harder it is to understand and the greater the potential risk.