AGL Credit Management announces the launch of AGL Private Credit Platform and exclusive Cooperation Agreement with Barclays
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Insights
The formation of AGL Private Credit, a collaboration between AGL Credit Management and Barclays, represents a strategic move in the private credit sector. This joint venture leverages AGL's expertise in corporate credit strategies and Barclays' robust leveraged finance and investment banking operations. The exclusive Cooperation Agreement grants AGL PC a unique position by providing proprietary access to Barclays' deal flow, potentially enhancing the platform's investment opportunities.
From a financial perspective, the anchor commitment by the Abu Dhabi Investment Authority signals strong investor confidence and provides a foundational capital base for AGL PC. This could translate into increased stability and growth potential for the platform. The focus on directly originated senior secured loans targets a segment of the market that often offers higher yields and lower default rates compared to unsecured lending, which might attract investors looking for a balance of risk and return.
However, the success of this venture will largely depend on the ability to effectively manage risks associated with private credit investments, including credit risk, liquidity risk and the regulatory landscape. The hiring of Phil Capparis as Chief Risk Officer is a proactive measure to strengthen the risk management framework, which is a critical component for the long-term sustainability of the platform.
The launch of AGL Private Credit is indicative of the evolving landscape in the private credit market. As traditional leveraged finance faces challenges, such as increased regulation and market saturation, private credit has become an attractive alternative for both borrowers and investors. The convergence of private credit with the broadly syndicated loan and high yield bond markets suggests an expansion of investment opportunities beyond traditional boundaries.
AGL PC's strategy to focus on large corporate borrowers could capitalize on the growing trend of companies seeking alternative financing sources outside of public markets, particularly in an environment where interest rates and borrowing costs are fluctuating. This could position AGL PC as a go-to platform for large corporates in need of flexible and tailored financing solutions.
Moreover, the partnership with Barclays could provide AGL PC with a competitive edge in deal sourcing, which is often a challenge in the private credit space. The ability to originate transactions directly, coupled with exclusive access to Barclays' deal flow, may lead to a more diverse and robust portfolio, potentially improving risk-adjusted returns for investors.
The establishment of AGL Private Credit involves complex legal and regulatory considerations, especially given the international nature of the parties involved. The long-term Cooperation Agreement between AGL and Barclays will likely include detailed provisions covering the exclusivity of deal flow, responsibilities of each party and mechanisms for conflict resolution. It's essential for the agreement to be structured in a way that aligns with the regulatory requirements of all jurisdictions in which AGL PC operates.
Furthermore, the role of private credit in corporate financing is subject to evolving legal frameworks, particularly as governments and regulators worldwide scrutinize non-bank lending practices. AGL PC will need to navigate these regulations carefully to maintain compliance and safeguard the interests of its stakeholders. The involvement of ADIA as an anchor investor also brings to the forefront considerations regarding sovereign wealth fund investments and the potential for increased regulatory scrutiny.
Lastly, as AGL PC grows and potentially attracts more institutional investors, it will need to maintain rigorous governance standards and transparency to meet investor expectations and regulatory demands. This includes clear reporting on investment performance, risk management practices and adherence to ethical investment principles.
- Peter Gleysteen, Founder, CEO and CIO of AGL, will lead the platform and its investment strategy
- Barclays provides the platform exclusive access to differentiated deal flow from its leading leveraged finance and investment banking franchise
- The platform has received an anchor commitment from a wholly owned subsidiary of the Abu Dhabi Investment Authority
Text reading, "Announcing the launch of AGL Private Credit Platform," in front of city buildings. (Graphic: Business Wire)
AGL PC combines AGL’s established credit competency with proprietary access to Barclays’ leading leveraged finance and investment banking origination capabilities through a long-term Cooperation Agreement. The platform will focus on directly originated senior secured loans to large corporate borrowers and will seek to capitalize on an attractive and growing opportunity at the convergence of the private credit, broadly syndicated loan and high yield bond markets. AGL PC will operate as an independent manager, with complete control over origination, asset selection, portfolio construction and portfolio management; while having exclusive access to Barclays deal flow, as well as the ability to originate transactions directly. The platform has received an anchor commitment from a wholly owned subsidiary of the Abu Dhabi Investment Authority ("ADIA").
AGL Founder, CEO and CIO Peter Gleysteen said, “We have the remarkable opportunity to combine our firm’s deep capabilities in corporate credit investing with access to Barclays’ strong origination, sector and advisory expertise to form a leading private credit platform. As the traditional leveraged finance and private credit markets continue to evolve, this is a synergistic extension of our market-leading specialized investment business. We are pleased to collaborate with Barclays to offer its clients the private credit benefits of certainty, speed and long-term investment alignment and separately for AGL to provide a private credit opportunity to our investor universe.”
AGL PC will incorporate key elements of AGL’s investment model with decisions made by AGL’s Investment Committee and will be supported by the full depth and breadth of the firm’s investing resources and operational infrastructure. Gleysteen, a pioneer in leveraged finance, will lead AGL PC and its growing team of 11 dedicated investment professionals, including Taylor Boswell, AGL’s Head of Private Credit. AGL also recently hired Phil Capparis as Chief Risk Officer to oversee risk management across AGL’s investments, including AGL PC.
“This is the next step in building out Barclays’ private credit capabilities to complement the top-tier capability of our existing Leveraged Finance platform, which continues to evolve and respond to market dynamics,” said Taylor Wright, Co-Head of Investment Banking at Barclays. “Across our client base, there is a strong desire to work with a single partner who can deliver the full range of financing solutions to meet their strategic objectives and AGL’s strong investment capabilities and track record make them an ideal collaborator for us in this venture.”
Hamad Shahwan Al Dhaheri, Executive Director of the Private Equities Department at ADIA, said: “ADIA has been an investor in AGL since it launched in 2019, and this anchor commitment to AGL PC will support the next phase of the Company’s growth. We see strong investing synergies from the combination of AGL and Barclays’ expertise, creating a differentiated private credit platform that aims to address a clear market opportunity.”
About AGL Credit Management LP
AGL Credit Management is a premier, independent corporate credit asset manager focused on investment offerings designed to deliver secure, stable and scalable cash yield driven returns to investors globally. The firm launched in March 2019 and has
About Barclays Investment Bank
Barclays Investment Bank is comprised of the Investment Banking, International Corporate Banking, Global Markets and Research businesses. It provides money managers, financial institutions, governments, supranational organizations and corporate clients with services and advice for their funding, financing, strategic and risk management needs. For further information about Barclays Corporate and Investment Bank, please visit our website www.ib.barclays.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240402291135/en/
Prosek Partners
Josh
Jclarkson@prosek.com /
pro-agl@prosek.com
Barclays
Andrew Smith
andrew.x.smith@barclays.com
Source: Barclays
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