<\/p>\n
Fears of a private credit-led crisis have been \u201coverstated\u201d and the growth of private credit does not pose a systemic risk to the economy, according to analysts at JP Morgan Private Bank.<\/p>\n
They observed that while private credit assets under management grew at more than 14 per cent compound annual growth rate over the past decade, the sector still only accounts for around nine per cent of total corporate borrowing.<\/p>\n
Their view on private credit has also been informed by the fact that levels of US \u201crisky credit\u201d outstanding has \u201chovered\u201d at approximately 20 per cent of GDP for a decade.<\/p>\n
\u201cThere has not been an explosion in US risky credit; private credit has taken share from other risky credit types,\u201d analysts wrote.<\/p>\n
However, this issue has only impacted the wealth channel so far and JP Morgan analysts highlighted private credit\u2019s primarily institutional investor base, which stood at around 80 per cent at the end of 2024.<\/p>\n
\u201cInstitutional capital is typically longer-duration and less redemption sensitive, reducing the likelihood of rapid outflows, forced asset sales, or fund gating during periods of market stress,\u201d according to the private bank\u2019s analysts.<\/p>\n
They also downplayed the risks from private credit\u2019s exposure to software, amid concerns that artificial intelligence (AI) could upend the software sector.\u00a0<\/span><\/p>\n The analysts said that \u201cnot all software or services are equally exposed, and understanding the nuances is critical\u201d, calling recent volatility \u201ca sector-led reset rather than the start of a macro default cycle\u201d.<\/p>\n They did, however, acknowledge that AI-related disruption is \u201ccreating cracks in pockets of software\u201d and that software exposure has steadily increased in the leveraged loan market over the past 15 years.\u00a0<\/span><\/p>\n Private credit has approximately 21 per cent exposure to software, rising to 40 per cent when including broader tech\/business services \u2013 the highest among extended credit markets.<\/p>\n They identified that, within services, the risk is at \u201cthe task level\u201d, with standardised, repeatable work likely to be most vulnerable, while tasks requiring trust, accountability, or physical execution are \u201cmore defensible\u201d.<\/p>\n In software-as-a-service, \u201cthe question is whether AI erodes the product\u2019s moat\u201d.\u00a0<\/span><\/p>\n \u201cDeeply embedded, data-rich, mission-critical software is safer. Generic, labour-scaled, or easily replaced tools are at risk. Seat-based revenue models are more at risk than usage-based,\u201d the firm\u2019s analysts wrote.<\/p>\n <\/p>","protected":false},"excerpt":{"rendered":" Fears of a private credit-led crisis have been \u201coverstated\u201d and the growth of private credit does not pose a systemic risk to the economy, according to analysts at JP Morgan Private Bank. They observed that while private credit assets under management grew at more than 14 per cent compound annual growth rate over the past […]<\/p>\n","protected":false},"author":1,"featured_media":5747,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5746","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bez-rubriki"],"featured_image_src":{"landsacpe":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2026\/03\/JPMorgan-6.jpg",505,360,false],"list":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2026\/03\/JPMorgan-6-463x348.jpg",463,348,true],"medium":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2026\/03\/JPMorgan-6-300x214.jpg",300,214,true],"full":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2026\/03\/JPMorgan-6.jpg",505,360,false]},"_links":{"self":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/5746","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/comments?post=5746"}],"version-history":[{"count":1,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/5746\/revisions"}],"predecessor-version":[{"id":5748,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/5746\/revisions\/5748"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/media\/5747"}],"wp:attachment":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/media?parent=5746"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/categories?post=5746"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/tags?post=5746"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}