Key insights
- JPMorgan is launching a private credit fund with limited quarterly redemptions (7.5%) amid rising investor unease and redemption pressures in the private credit industry. This follows similar moves by Ares, Apollo, and BlackRock to limit withdrawals. Increased redemption requests and concerns over lending standards in private credit signal potential liquidity risks and could negatively impact broader market sentiment.
March 26 (Reuters) - JPMorgan Chase has filed with the U.S. Securities and Exchange Commission for a private credit fund that will allow investors to redeem 7.5% quarterly, as withdrawal pressures build across the industry.
According to a prospectus on Wednesday, JPMorgan Public and Private Credit Fund has also asked the market regulator for an exemption that would allow it to repurchase at least 2% of outstanding shares each month.
The fund would typically invest at least 80% of its net assets, plus any borrowings for investment purposes, in credit investments, the prospectus said.
While the fund’s policy permits repurchases of between 5% and 25% of outstanding shares every quarter, it currently "expects" to repurchase 7.5%, it said.
The filing comes as the roughly $2-trillion private credit industry faces investor unease over lending standards and outsized exposure to the software industry, which has led to a wave of redemptions and pushed some to limit withdrawals.
Earlier this week, Ares Management became the latest alternative asset manager to cap investor withdrawals at a private credit fund following a surge in redemption requests, joining the ranks of Apollo Global and BlackRock.