JPMorgan Asset Management CEO George Gatch Talks Public Versus Private Markets

Summary

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Podcast Summary:

Bloomberg Talks
Episode: JPMorgan Asset Management CEO George Gatch Talks Public Versus Private Markets
Date: October 1, 2025
Host: Bloomberg (Interviewer: Katie)
Guest: George Gatch, CEO of J.P. Morgan Asset Management

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Episode Overview

This episode features an in-depth conversation with George Gatch, CEO of J.P. Morgan Asset Management, focusing on the evolving relationship between public and private markets, liquidity considerations, portfolio construction, innovation in asset management, and regulatory developments such as ETF share class exemptions. Gatch provides nuanced insights into the current investment landscape, the integration of private credits into traditional portfolios, and the future direction of asset management tools and products.

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Key Discussion Points & Insights

1. The Blurring Line between Public and Private Markets

[00:34 – 02:15]

• Integration of Markets:
  Gatch highlights the increased convergence between public and private markets, noting how investors may soon look across both landscapes for optimal opportunities.

  • “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…is great for investors.”
    — George Gatch [00:59]

• Due Diligence on Liquidity:
  Emphasizes that while combining private assets can be beneficial for diversification, it’s crucial to balance these benefits with liquidity constraints.

• Portfolio Flexibility:
  Portfolio managers now have greater optionality to move between syndicated lending, public bonds, and private credit based on relative values—tailoring solutions to market conditions and investor needs.

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2. Liquidity & Portfolio Construction

[02:15 – 03:25]

• Private Credit Allocation in Portfolios:
  Gatch refrains from recommending a universal allocation to private credit, underscoring the personalized approach:

  • “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.”
    — George Gatch [02:45]

• Importance of Liquidity in Daily-Valued Products:
  Especially for ETFs and mutual funds that offer daily redemptions/purchases, maintaining adequate liquidity is paramount, especially as the industry explores using private assets in such vehicles.

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3. Return Potential and Portfolio Innovation

[03:25 – 04:38]

• Rethinking the “60/40” Model:
  The host brings up diversification in the context of the traditional 60/40 (stock/bond) retirement model.

• Innovation in Public Markets:
  Gatch points to ongoing innovation, including derivative income strategies:

  • “Public markets aren't dead. There's a tremendous amount of innovation…to produce uncorrelated returns to diversified portfolios. Further, private markets are going to offer the same opportunity…”
    — George Gatch [03:45]

• Fee and Disclosure Considerations:
  He stresses the importance of transparency and understanding fee structures in private markets.

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4. The Future: Convergence and Market Evolution

[04:38 – 05:24]

• Will Public & Private Markets Become More Alike?
  Gatch predicts an increasing similarity:

  • “Is the private markets going to look more, 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…markets.”
    — George Gatch [04:54]

• Continued Innovation:
  The march toward transparency and liquidity is seen as transformative and positive for investors.

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5. Relative Valuations: Public vs. Private Credit

[05:24 – 06:28]

• Current Market Outlook:
  Gatch observes that markets are currently pricing in a healthy economic outlook, with narrow spreads in both public high yield and private credit.

• Preference for Public Markets Now:
  He points out that, considering liquidity and current conditions, public markets may offer relative value:

  • “I continue to believe that public markets offer tremendous opportunity…particularly taking into account liquidity considerations, I tend to steer today towards public markets as being relative better value.”
    — George Gatch [05:47]

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6. ETF Share Classes – Regulatory Change

[06:28 – 07:53]

• SEC Exemptive Relief:
  Discussion of the recent SEC move allowing ETF share classes alongside mutual funds and JP Morgan’s similar pending application.

• Industry Impact:
  Gatch emphasizes how combining the advantages of mutual funds (such as tax deferral) and ETFs (transparency, liquidity, lower fees) could be transformational:

  • “One of the most exciting things…is now world class active investment capabilities available with the benefits of ETFs, transparency, liquidity and fees...the ability for an individual investor to tax free exchange from a mutual fund and then to get the benefits of an ETF traded on an exchange is going to be just another potential transformation of the asset management industry…”
    — George Gatch [07:04]

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Notable Quotes

• “The ability for a portfolio manager to look at relative values across all of those markets…and to move across those markets I think is going to be advantage over time assuming investors can handle the liquidity of private markets, which is a very important consideration.”
  — George Gatch [01:36]

• “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.”
  — George Gatch [03:45]

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Memorable Moments & Timestamps

• [00:59] — Gatch on the need for cautious integration of privates.
• [02:45] — Gatch clarifies there is no "one-size-fits-all" allocation for private credit.
• [03:45] — On public markets innovation and the new role of derivatives.
• [05:47] — Gatch tips public markets as currently offering better value.
• [07:04] — Gatch’s enthusiasm about ETF share class innovations and potential tax efficiency for investors.

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Conclusion

George Gatch offers a pragmatic yet optimistic view of the asset management landscape—highlighting the benefits of innovation, the importance of liquidity, and the significant regulatory and product evolution on the horizon. He portrays a future where the boundaries between public and private investments continue to blur, driven by technology, transparency, and investor demand for efficiency and flexibility. The integration of ETF share classes represents just one of many potential revolutions in how asset management serves both institutional and retail investors.

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Transcript

[Indiana University Narrator]

Indiana University is shaping the future of health care, advancing discoveries that become treatments for Alzheimer's, obesity and cancer and training the providers trusted to deliver them. See how IU solves what's next iu Edu Impact.

[Bloomberg Host]

Bloomberg Audio Studios Podcasts Radio.

[Katie (Interviewer)]

News let's keep the conversation going right now. George Gatch, he is the CEO of J.P. morgan Asset Management. He joins us on set. Great to see you in person, George.

[George Gatch]

Oh, great to be here, Katie. Thank you for the invite.

[Katie (Interviewer)]

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 to 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?

[George Gatch]

Yeah, well the way the way I think about it is that it's happen 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 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 to weigh those chall 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 with private 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. It's not always high answer isn't always high yield. But the ability for a portfolio manager to move across those markets I think is going to be advantage over time assuming investors can handle the liquidity of private markets, which is a very important consideration.

[Katie (Interviewer)]

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?

[George Gatch]

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, as a general, as a general statement, I do think importantly for ETFs and mutual funds, which are daily valued and daily redemptions and purchases occur, that it's very important that the liquidity considerations be of paramount importance. That's particularly important as we move towards defined contribution plans and other conversations that are happening in the industry around the use of private securities in, in daily valued portfolios.

[Bloomberg Host]

There's been also a lot of talk in addition to the liquidity issues about return possibilities, if you will, and how that stacks up against more tradition assets. I mean, obviously you know, the 6040, I know that's long gone, but that was sort of, at least from a retirement plan perspective, that was sort of the model maybe on a sort of a targeted sort of ramp up into one or the other. How much does that change?

[George Gatch]

Well, the way I think about it and our, our teams, our teams think about it is the, the, the advantage of public markets in terms of the liquidity profile. And public markets aren't dead. There's a tremendous amount of innovation that is happening. We pioneered the use of derivative income strategies and that's become a major 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 a, quite closely in evaluating the use of private markets and diverse and diversified portfolios.

[Bloomberg Host]

Are you getting that diversification too? If we start to see more of this convergence between public and private markets, I mean, is that separation that is 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?

[George Gatch]

Yes, I think so. I mean, if you think about what's going to happen in five to 10 years tomorrow, or is the private markets going to look more, 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, of, of the markets. But 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 US and the asset management space.

[Katie (Interviewer)]

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. Feels like since then spreads have only gotten tighter. So I mean right now where do you stand?

[George Gatch]

Well, I think markets are pricing in a very favorable outlook on, 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, 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 relative better value.

[Katie (Interviewer)]

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 J.P. morgan and the asset management industry at large?

[George Gatch]

I think one of the most exciting things 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 today 145 ETFs around the world, over $300 billion in assets. We're one of the leaders in active ETF capabilities. The additional tool of being able to offer a share class and the ability for an individual investor to tax free exchange from a mutual fund and then to get the benefits of an ETF traded on an exchange is going to be just another potential transformation of the asset management industry and one that we are excited to see.

[Bloomberg Host]

George, great to have you.

[George Gatch]

Thank you very much.

[Bloomberg Host]

George Gatch is the CEO of J.P. morgan Asset Management.

[Indiana University Narrator]

Indiana University is shaping the future of health care. Advancing discoveries that become treatments for Alzheimer's, obesity, cancer and other rare and complex diseases. And training the next generation of providers, doctors and nurses trusted to address health challenges with skill, compassion and purpose. From the lab to the clinic, from research teams to patient care, IU talent is driving medical innovation, improving health outcomes and strengthening communities. See how IU solves what's next IU Edu Impact.

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