Credit Suisse, JPMorgan Echo Goldman in Fighting Private Credit

Wall Street banks, getting trounced by money managers in the battle for the high-fee business of financing risky companies, are setting up direct lending operations to fight back.

Credit Suisse Group AG, JPMorgan Chase & Co.and Morgan Stanley are among the banks creating units to lend money directly to junk-rated companies for areas like leveraged buyouts and acquisitions, or building up their businesses. They’re following a path that Goldman Sachs Group Inc. has successfully taken since the 2008 financial crisis.

The banks are struggling to regain ground they’ve lost to direct lending powerhouses like Blackstone Group Inc., ...