Feb. 19 at 10:02 PM
PickAlpha Midday:
Bank of America is reportedly committing
$25B of its own balance sheet to private credit, bringing it more directly into the ~
$1.8T market and catching up with peers who’ve already formalized big allocations (e.g., JPM’s incremental
$50B set-aside last year). BAC plans to originate from its capital-markets division and has named dedicated leadership for structuring/underwriting and private-credit coverage. (http://bloomberg.com)
Tickers:
$BAC $ARES $APO
Our view is this is the banks admitting private credit is now a core profit pool - but it’s also where “hidden duration + underwriting discipline” gets tested. If defaults stay contained and structures hold, this is ROE accretive and supports the multiple; if the cycle turns, private credit becomes the next place investors demand transparency and higher loss reserves.
