Bloomberg Talks
JPMorgan Asset Management CEO George Gatch Talks Public Versus Private Markets
01 Oct 2025
Chapter 1: What is the main topic discussed in this episode?
Hello and welcome. This is The Michelle Hussein Show. I'm Michelle Hussein. I speak with people like Elon Musk. I think I've done enough. And Shonda Rhimes. That's so cute. This will be a place where every weekend you can count on one essential conversation to help make sense of the world.
So please join me, listen and subscribe to The Michelle Hussein Show from Bloomberg Weekend, wherever you get your podcasts. You certainly ask interesting questions. Bloomberg Audio Studios. Podcasts, radio, news. Let's keep the conversation going right now. George Gatch, he is the CEO of JPMorgan Asset Management. He joins us on set. Great to see you in person, George.
Oh, great to be here, Katie. Thank you for the invite. Let's talk about that a little bit more because it seems like, I mean, you think about some of the issuers in the bond markets, switching between private and public markets. Then you think about some of the companies in the equity markets, too, those take privates that are happening.
As the CEO of an asset manager with about $4 trillion in assets under management, how are you approaching that blurring distinction? Well, the way I think about it is that it's happening.
The opportunity to be able to provide investors with the advantage of public markets, deep liquidity, transparency, fees, and combine that with the diversification potential that you have in private markets, I think is great for investors. I do think, though, you need to approach it relatively cautiously.
Many investors face liquidity issues in their portfolios, and I think it's important to weigh those challenges as well as the advantages that you see. But you're absolutely right. In fixed income markets, borrowers and issuers are approaching the syndicated lending market, they're issuing public bonds, and sometimes they're negotiating private transactions with private credit providers.
The ability for a portfolio manager to look at relative values across all of those markets. And the answer isn't always private credit. The answer isn't always high yield. But the ability for a portfolio manager to move across those markets, I think, is going to be a big advantage over time, assuming investors can handle the liquidity of private markets, which is a very important consideration.
Yeah. Well, there's a lot to dig into there, but let's dig into that last point specifically, the liquidity. When you think about how much private credit should be in the average portfolio, and I know that doesn't exist, I wonder where you fall on that question. I know that JP Morgan Asset Management filed for a total credit ETF yesterday that has an up to 15% allocation to private credit.
I know you can't speak specifically to an active filing, but I mean, 10% to 15%, does that sound right? Well, I think it really depends on the individual circumstances and the investment horizon and risk tolerance of the individual investors. I don't think you can answer that as a general statement.
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Chapter 2: What is the blurring distinction between private and public markets?
opportunity in the market to produce uncorrelated returns to diversified portfolios further. Private markets are going to offer the same opportunity to do that. And importantly, though, disclosures, transparency, the level of fees are something that individual investors and institutions need to consider quite closely in evaluating the use of private markets and diversified portfolios.
But are you getting that diversification? But two, if we start to see more of this convergence between public and private markets, I mean, is that separation that has traditionally sort of made private markets more attractive, does that get blurred or muted a little bit as it sort of moves, I guess, more into the public sphere? Yes, I think so.
I mean, if you think about what's going to happen in five to ten years tomorrow, is the private markets going to look more like public markets? Probably. And that's going to relate to transparency. It's going to relate to fees, secondary market liquidity. Those are all going to change the dynamics of the markets.
The innovation that's going to continue to occur in the development of these tools for investors, I think that's one of the most exciting things about markets today and what's happening in the asset management space. I also want to talk about relative valuations a little bit here because you and I last spoke, I think at the end of June, and you made the interesting point that
You take a look at the private credit landscape and it looks a little bit frothy, especially when you take a look at public high yield, for example. It feels like since then, spreads have only gotten tighter. So, I mean, right now, where do you stand? Well, I think markets are pricing in a very favorable outlook on both credit and equity markets, and for good reason.
The economy is quite healthy. Consumer balance sheets are healthy. The corporate sector. And that's... priced into equity and spreads in high yield markets. I continue to believe that public markets offer tremendous opportunity for investors.
And I think if you look at particularly taking into account liquidity considerations, I tend to steer today towards public markets as being relatively better valued. And George, before we let you go, I have to ask you about something fairly in the weeds, and that is what we saw on Monday.
The SEC putting out a statement that it intends to grant dimensional fund advisors exemptive relief to offer ETF share classes as share classes of their mutual funds. I know that JP Morgan has filed for similar exemptive relief. And I think for a lot of people, it's hard to grasp why this is important. So I would love if you could put this into context.
the ability to offer ETF share classes of existing mutual funds. I mean, what would that mean for JP Morgan and the asset management industry at large? I think one of the most exciting things that's happened in the asset management industry is now world-class active investment capabilities available with the benefits of ETFs, transparency, liquidity, and fees. Now, we have...
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