(Bloomberg) — Barclays Plc is finalizing a partnership with AGL Credit Management to invest in the fast-growing $1.5 trillion private credit market, according to people with knowledge of the matter.
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Abu Dhabi Investment Authority is in talks to anchor the partnership’s first fund, said the people, who asked not to be named when discussing confidential information. The fund is expected to have at least $1 billion of equity commitments at launch, they said.
It will have a similar structure to a business development company, an investment vehicle originally targeted to retail investors in the US that’s become increasingly popular among large institutional buyers, said the people.
Representatives for ADIA, AGL and Barclays declined to comment.
The tie-up would combine the UK bank’s loan origination capabilities with the credit investing expertise of AGL, the firm founded by veteran banker Peter Gleysteen and the late Thomas H. Lee. It would allow both firms to compete more directly with private credit funds, which are increasingly replacing banks and the broadly syndicated debt markets by providing funding to leveraged companies.
Read more: Blue Owl Says a $10 Billion Private Credit Loan Is Within Reach
AGL, which was created with substantial backing from an ADIA subsidiary in 2019, has traditionally focused on bank loans and collateralized loan obligations. It recently hired Taylor Boswell, a former Carlyle Group Inc. executive, as part of a push into direct lending, Bloomberg News reported last month.
Like many of its peers, Barclays has been looking for ways to gain a foothold in private credit. The bank recently set aside cash on its balance sheet to assist with that effort, Bloomberg reported.
–With assistance from Nicolas Parasie.
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