Private credit bristles at Dimon roach barb

Clash highlights shift in financing industry

- SRIDHAR NATARAJAN

JPMorgan Chase & Co CEO Jamie Dimon in 2012. Mr Dimon warned on Tuesday that there may be 'more cockroaches' in the debt markets. REUTERS

On Wall Street, everyone's a friendly rival until the losses start.

A pair of blowups in the credit market have sparked a war of words over whether banks or private credit firms are better positioned to weather a broader downturn.

JPMorgan Chase & Co Chief Executive Officer Jamie Dimon used his bank’s losses from auto lender Tricolor Holdings to say there’s never just one cockroach — a quip some of his non-bank rivals have taken as a shot at them.

Blue Owl Capital Inc boss Marc Lipschultz fired back, saying the issue was in loans that banks led, so Mr Dimon should be scouring his own books if he wants to squash more bugs.

Mr Lipschultz’s remarks gave voice to the sentiments of a swath of private credit executives. They've privately complained that sloppy diligence from banks on Tricolor and car-parts supplier First Brands Group are instead being held up as evidence of growing risks enabled by newer players muscling into lending.

“There are people who have meaningful, parochial interests in the industry not continuing to grow and succeed,” Mr Lipschultz said of the scorn heaped on private-market players. “Blackstone's market cap exceeds the market cap of most financial institutions in the world today. It’s not as if that’s not coming from someone, and of course those people don’t like it.”