"Two years ago, Blackstone's President Jon Gray said private credit was in a " golden moment," and it has since become the hottest corner of Wall Street. There have always been private credit critics, but a deluge of digs from industry watchers turned the spotlight back on the so-called shadow lenders, challenging their shining narrative and raising uncomfortable questions about potential contagions."
"And even though Dimon clarified that Tricolor, a company that offered financing for used cars to customers with limited or no credit history, is not typically what one would consider private credit (and may even involve fraud) and that there are "early signs" that there may be "some excess" in this 15-year credit bull market more broadly, many of the biggest private credit players took the comments from their longtime critic personally."
Private credit surged into prominence after Blackstone's Jon Gray called it a "golden moment," making it a fast-growing corner of finance. Industry critics and observers have questioned shadow lenders and potential contagion risks. Jamie Dimon linked bankruptcies at First Brands and Tricolor to broader credit worries, noting a $170 million loss related to Tricolor and saying, "When you see one cockroach, there's probably more." Dimon also clarified that Tricolor may not typify private credit, cited possible fraud, and warned of "early signs" of excess in a long credit bull market. Major private credit firms responded defensively, and the debate over hidden risks intensified.
Read at Business Insider
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