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“I’ve never seen a play like this in my 18 years hiring into credit markets,” says Edward James, founding director of finance headhunter RCQ Associates. Winning back trust will be tough. Many investors are furious, both with Barings for letting this happen and with the leavers for not letting on about their exodus. Some defectors were taking investor meetings days before they quit.
The message from several LPs is clear, though: Both sides have suffered real harm to their reputations. Raising new money won’t be easy.Tensions at GPF had been building for a while, people familiar with the matter say. Many in the team didn’t feel adequately backed by Barings and its owner, US insurer MassMutual, with some complaining of not getting full support for operational matters and recruitment.
Regardless of the legal outcome, the episode has shaken a private credit industry that leans heavily on the contact books of its star managers. If it can win over investors, Corinthia may be a model for other upstarts looking to grab teams — a disruptive gambit more common to investment banks — and for any teams who’d love to snag a more lavish share of this market’s boom times. Fail, and wannabe defectors may decide it’s not worth the aggravation.
That struck a different tone to the lawsuit, which stated that globally the defectors “included nearly all of the senior members” of the team. Adam Wheeler and Ian Fowler, the group’s coheads, were front and center. And Europe, which bore the brunt of the exits, is a big deal for GPF. It was ranked at one point in 2022 as the leading lender to midmarket companies there.
His background is very different to the usual crowd of tight-lipped ex-investment bankers who populate private credit’s upper reaches. He made his name in the rowdy world of real-estate investing, cofounding Cromwell Property Group — where the wife of one of the Barings defectors worked for a while — and turning it from a local Australian fund into a global, publicly listed company.