The Zhitong Finance App learned that US commercial banking giant J.P. Morgan Chase (JPM.US) is seeking to acquire a private finance company in the market to expand its asset management department to reach 3.6 trillion US dollars. America's largest bank is expanding further into Wall Street's hottest sector. According to media reports, citing information revealed by people familiar with the matter, J.P. Morgan's asset management department is actively seeking a private credit institution to comprehensively strengthen its private capital business. As part of this effort, the company negotiated the acquisition of Chicago-based Monroe Capital this year, but people familiar with the matter said the two companies ultimately decided not to seek a deal.

Financial institutions' interest in investing in the $1.7 trillion private credit industry has surged in recent years. Alternative asset giants such as Ares Management Corp. and Apollo Global Management (Apollo Global Management) have invested more and more large-scale credit transactions into their product portfolios. Other institutional investors, as well as the banks themselves, are keen to increase their bets.

According to information, the investment banking division under J.P. Morgan Chase has allocated more than 10 billion US dollars from the bank's balance sheet for direct loans. The media previously reported that the bank is also establishing partnerships with some private asset management companies to participate in more private credit transactions.

Asset management departments generally manage funds for wealthy people and institutions, including endowments and pension funds. The J.P. Morgan Chase division is seeking to expand the scale of its private credit business or products. By the end of last year, the division managed up to $17 billion in private credit-type assets, which is less than the nearly $19 billion promised and managed capital that Monroe Capital had as of April 1.

For a direct lender, selling the business to a major commercial bank may have a substantial impact on its franchise. This business will move from a corner with few regulatory rules in the financial industry to an area subject to strict rules and diverse regulators. With this in mind, some private credit institutions mistakenly chose to cooperate with commercial banks rather than merge with banks.

One of the people familiar with the matter said that although the acquisition will help J.P. Morgan Chase's asset management department grow rapidly, the agency may eventually decide to increase private credit business more appropriately.

At Monday's Investor Day event, J.P. Morgan Chase's senior leaders discussed Wall Street's focus on the sector and J.P. Morgan's efforts to establish new businesses in various fields. The bank's president, Daniel Pinto (Daniel Pinto), said the bank must “find a path in the trust sector, just like we found in the non-trust sector, to better enter the private credit sector.” He added that Mary Eldos, who has been the longtime head of asset and wealth management, and the team she manages are “working to solve this problem.”

J.P. Morgan CEO Jamie Dimon (Jamie Dimon) seemed to have a different opinion: “We probably wouldn't choose to buy a private capital company,” he said in response to questions about the topic, but he quickly retracted that statement. Dimon said his senior deputy “should always be thinking, no matter what I say.” “I mean it. I have my own opinions, but if they come in and say we have something amazing that makes sense to us then yes, well, we really should do it.”