The explosion of private credit has been met with a whole host of concerns, but among the louder ones more recently is that the industry has not experienced a downturn at scale.
"A lot of those folks who took private-credit loans will be stranded when [obscenity] hits the fan," Dimon said.
"Banks tend to work with the borrower and the middle-market loan in the crisis…in the mark-to-market world of private credit, they have to, as a fiduciary, book it at par."
In other words, he said, "private credit hasn't dealt with high interest rates, hasn't dealt with the recession, and it hasn't dealt with high spreads."
"[Ares has] invested $150 billion into the private-credit market since we founded the firm, and we had a loss rate of one basis point.
Persons:
Jamie Dimon, Dimon, Banks, hasn't, Ares, Michael Arougheti, it's, Arougheti
Organizations:
CNBC, Ares Management
Locations:
United States, America