Barclays’ private credit partner struggles to raise new funds

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Barclays’ private credit partner has struggled to attract fresh investment almost a year after it announced a tie-up with the bank, damping hopes the deal could provide the British lender with firepower to compete in a $1.6tn market.

AGL Credit Management unveiled its private credit platform last April with the benefit of a $1bn anchor investment from the Abu Dhabi Investment Authority (Adia) and an exclusive arrangement with Barclays. But it has since struggled to pull in other investors to its fund.

Excluding the commitment from Adia, which has backed New York-based AGL since its launch in 2019, the fund had attracted less than $70mn of capital from other investors through the first quarter, filings with the US Securities and Exchange Commission show.

The fundraising process was described as “slow” by two people with knowledge of the efforts. One of the people said it was “hard to fundraise” because AGL “don’t have a track record in private credit.”

When it launched, the partnership was touted as a way for Barclays to tap the growing private credit market, where investment funds write loans that were traditionally doled out by banks, and the two firms agreed to a five-year co-operation agreement as part of the deal.

Barclays did not commit its own funds, but AGL obtained a right of first refusal on the bank’s deals. It could also invest in transactions underwritten by other banks.

Taylor Wright, Barclays’ co-head of investment banking, said at the time that there was a “strong desire” from the bank’s clients “to work with a single partner who can deliver the full range of financing solutions . . . and AGL’s strong investment capabilities and track record make them an ideal collaborator.” 

However in its annual report, AGL told investors that its limited record was a risk factor, and noted that many of its competitors “are more experienced, substantially larger and have considerably greater financial, technical and marketing resources than we do.” The fund listed investments worth $473mn at the end of last year.

The fundraising difficulties are one symptom of the slowdown in private markets, which has curtailed the ability of large investors to commit new funds.

Private credit fundraising fell for a third consecutive year in 2024, with the lion’s share of new commitments going to established players, according to data from Preqin. 

Two people briefed on the partnership rejected the suggestion that fundraising was slow, with one noting that Barclays and AGL had not set any hard targets for the efforts. A second person said that AGL was in conversation with potential investors who were still conducting due diligence on the fund.

“We are very pleased with the high level of interest in AGL’s new Private Credit platform with all investments in line with our differentiated strategy since the October launch,” AGL said in a statement.

“Barclays delivers a full range of strategic and financing solutions to clients, including direct lending,” the bank said. “We are pleased with how the partnership with AGL is progressing and we look forward to continuing to enhance our capabilities in this space.”

The strength of traditional bond and loan markets has limited any fallout for the bank from the fundraising challenges. Banks, including Barclays, have been comfortable to commit to new buyout financings themselves as markets have rebounded.