JPMorgan Chase is negotiating with investors to offload risk from over $4 billion in private equity loans, according to the Financial Times.
The bank is utilizing a risk transfer strategy for its net asset value (NAV) loans. This arrangement allows JPMorgan to keep the loans on its balance sheet while shifting potential losses to external investors.
Investor sentiment toward private credit is cooling due to relaxed lending standards. Additionally, concerns are rising that artificial intelligence could disrupt the software sector, a primary exposure for many private equity funds.