JPMorgan Asset Taps Lu, Van Elslander in Private-Debt Expansion
(Bloomberg) -- JPMorgan Chase & Co.’s asset management arm is expanding its presence within the $1 trillion private-credit market as huge sums of cash are being plowed into the asset class amid ultra-low interest rates.
JPMorgan Asset Management has tapped Vincent Lu and Brian Van Elslander to co-head the newly formed global performing credit group, according to a statement seen by Bloomberg. They will report to Meg McClellan, head of private credit at JPMorgan Private Capital.
Lu most recently served as co-head of private strategies at Wells Fargo Asset Management -- where he was brought on in 2019 to join Van Elslander, who held the same title. Prior to that, Lu spent 18 years working in private debt at Blackstone’s GSO Capital Partners -- currently Blackstone Credit. Van Elslander previously also held roles at Credit Suisse and JPMorgan.
The global performing credit group will target opportunities within direct lending, which is seeing record-sized loans to companies that historically would seek such financing through the broadly syndicated or high-yield bond market -- both of which are mediated by banks.
Investors, looking for yield in a low rate environment, are increasingly being drawn to the asset class. As of the second quarter, 68% of investors said they would commit to a direct-lending fund compared to just 39% a year ago, while private-debt managers are looking to raise a record $295 billion, according to industry research firm Preqin Ltd.
“This is the perfect instance of where market opportunity meets investment opportunity,” McClellan said in a phone interview. “You’ve got companies choosing to stay private longer, so they’ve got an array of financing needs.”
McClellan’s group will focus on the U.S. core middle market, around $50 million in earnings before interest, taxes, depreciation and amortization, on average, she said. The platform will be anchored by senior lending. McClellan also sees opportunities to provide unitranche loans -- which blend senior and subordinated debt into one credit facility -- as well as mezzanine or subordinated debt.
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