AGL Credit Management, Barclays’ private credit partner, has struggled to attract fresh investor capital nearly a year after announcing its strategic partnership with the bank, dampening expectations that the tie-up would bolster Barclays’ ability to compete in the $1.6tn private credit market, according to a report by the Financial Times.
AGL launched its private credit platform in April 2023 with a $1bn anchor commitment from the Abu Dhabi Investment Authority (ADIA) and an exclusive collaboration with Barclays.
However, the firm has faced challenges in raising additional capital, with filings to the US Securities and Exchange Commission indicating that, excluding Adia’s commitment, AGL had secured less than $70mn from other investors through the first quarter of 2024.
Two sources familiar with the fundraising process described the effort as “slow,” with one noting that AGL’s limited track record in private credit made capital raising difficult.
Despite the initial enthusiasm surrounding the partnership, which was positioned as a gateway for Barclays to expand into private credit lending, AGL has yet to gain significant traction.
The agreement grants AGL the right of first refusal on Barclays’ private credit deals while also allowing it to participate in transactions underwritten by other banks. However, Barclays did not commit its own capital to the initiative.
At the time of the launch, Taylor Wright, Barclays’ Co-Head of Investment Banking, emphasised strong client demand for a financing partner that could deliver comprehensive solutions. He cited AGL’s investment expertise and credentials as key advantages.
Yet, in its latest annual report, AGL acknowledged that its limited operating history presented a risk factor, highlighting that many competitors are larger and better resourced.
As of year-end 2023, AGL reported investments totaling $473mn. Its fundraising difficulties reflect broader challenges in private markets, where institutional capital commitments have slowed.
According to Preqin data, private credit fundraising declined for the third consecutive year in 2024, with investors favoring well-established managers.
Despite these headwinds, two individuals close to the partnership disputed the notion that fundraising efforts have faltered. One pointed out that Barclays and AGL had not set firm targets, while another noted that potential investors remained in due diligence.
In a statement, AGL expressed confidence in its strategy, emphasising a high level of investor interest since the fund’s October launch. Barclays reaffirmed its commitment to offering a broad spectrum of financing solutions, noting that the AGL partnership continues to develop in line with expectations.
Meanwhile, the robustness of traditional bond and loan markets has mitigated any significant impact on Barclays. As market conditions have improved, banks – including Barclays – have been more willing to finance leveraged buyouts directly, limiting reliance on third-party private credit capital.
