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  "documentTitle": "Private Credits Next Act",
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  "authorName": "Oliver Wyman",
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  "notes": "The slide explains the rationale behind banks partnering with private credit firms, focusing on capital efficiency and monetization of relationships.",
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      "text": "For banks that have become more capital challenged in recent years, partnerships present an appealing option: Banks retain their origination platform and primary customer relationship, but do not have to commit as much of their balance sheet.",
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      "text": "Pie chart showing 59% Direct lending, 29% Asset-based finance, 12% Leveraged finance",
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      "text": "Partnerships are another way banks can monetize private credit relationships. In many ways, such partnerships are an extension of banks' existing originate-to-distribute models. These arrangements are typically origination focused: The private credit firm gains access to (and participates in underwriting) front book flow that is originated by the bank.",
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      "text": "Why banks are looking to partner up with private credit",
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      "text": "For banks that have become more capital challenged in recent years, partnerships present an appealing option: Banks retain their origination platform and primary customer relationship, but do not have to commit as much of their balance sheet. For more complex or higher risk lending, banks may also be able to lean on private credit firms' greater flexibility, speed, and diversity in capital to provide solutions for their clients where they could not previously. Private credit firms benefit from the banks' extensive origination capabilities and access to vast customer bases and networks. However, it is not necessarily quite so straightforward. Banks will need to weigh up the risks of potential further disintermediation with the capital benefits.",
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      "text": "Finding ways to work with and monetize private credit relationships is a very hot topic across banking. These include providing leverage and other fund financing; distributing debt via the broadly syndicated loan market on deals they originate; supporting CLOs through issuance, trading, servicing, and as investors; distributing private credit assets to their wealth clients; and offering other products such as cash management, foreign exchange, and rates derivatives to private credit borrowers.",
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      "text": "Private credit partnerships are not a new phenomenon. The first joint venture partnership at scale was between Jefferies and Mass Mutual, launched 20 years ago to provide senior secured loans to private equity sponsored middle market and growth companies.",
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      "text": "Note: 1. As of April 18, 2024; 2. Largest banks in North America and Europe by billion dollars assets 2023. Source: Bank financials, industry press, Oliver Wyman analysis",
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      "text": "Exhibit 11: Direct (and leveraged) lending has been the preferred strategic focus for partnerships",
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