Private credit was never built to trade. Funds made the loans, and everyone held them until the borrower paid up.
JPMorgan just blew past that setup in five months. The biggest bank in the US has moved $2 billion in private credit loans this year, which tops every prior year of JPMorgan trading these loans combined.
Private credit is debt made outside the public markets, where big funds lend to private companies. The market is worth about $1.8 trillion and growing fast.
The catch was always liquidity, which is how easy it is to buy or sell something. Once a fund made a loan, it usually sat on it until the borrower paid them back.
That's starting to crack. Sanjay Jhamna, who runs credit trading at JPMorgan, and Jake Pollack, who runs credit financing, said the bank has now moved about 20 of these loans this year.
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JPMorgan first leaned into private credit trading a few years ago, but the desk struggled to find buyers and sellers willing to meet on price. Funds were happy to hold their loans, and banks didn't want to be stuck with the leftovers.
That has shifted as more money has poured into private credit and some funds now want a way out before maturity. JPMorgan can sit in the middle, finding the seller and the buyer, and getting paid for the match.
It's the same job a stock exchange does, just with loans nobody used to swap.
If private credit starts to trade more like bonds, the shape of the market changes. Pricing gets clearer, funds can move money in and out faster, and big banks pick up a new fee stream.
That last part matters because banks have made thinner profits in straight bond trading as more activity moves to electronic platforms. A new market in private credit is a fresh place to make money.
JPMorgan also signaled in April that it would put fresh capital behind its private credit push. Five months in, the numbers say the bet is working.
The real test is whether $2 billion turns into $20 billion. JPMorgan's volume is large for the bank but small next to the $1.8 trillion sitting in private credit.
Big private credit funds like Blackstone, Ares, and Apollo will also be watching. If JPMorgan can trade their loans, they might want their own trading desks too.
For now, the message from one of Wall Street's biggest desks is simple. Private credit can trade. They just proved it.
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