Exclusive: Barclays spinout eyeing up to $1 bln for debut fund

barclays

A new firm formed by former distressed debt executives from Barclays is preparing to hit the fundraising trail in search of about $1 billion, according to two people with knowledge of the situation.

Glendon Capital Management, which formed in April, will likely launch its debut fund in the first half of 2014, one person said. A spokesperson for Glendon declined to comment.

Glendon was formed by Barclays’ former head of distressed debt and special situations investing Matthew Barrett, and former managing directors Holly Kim and Brian Berman. The three worked at Barclays from 2006 to 2013, according to regulatory filings by Glendon. Eitan Melamed joined in 2007 from Goldman Sachs. Barrett, Kim and Berman all joined Barclays from Oaktree Capital Management.

Barclays spun the team off earlier this year and it continues to manage Barclays money. Glendon has about $2.8 billion in assets under management, which includes some capital from Barclays as well as other client accounts, according to filings with the SEC and one of the sources.

Barclays allowed Glendon to raise some capital from external sources, and those investors are expected to commit to the new fund, one of the people said.

The team has generated an annual rate of return of about 17 percent since 2007, according to one source in the market.

Meanwhile, Barclays has been going through big changes since hiring new chief executive officer Antony Jenkins last year. Jenkins has overseen a program of review of business lines and cuts focused on reducing the size of the bank’s balance sheet.

Earlier this year, Reuters reported that as part of Jenkins’ review, the bank had axed 3,700 jobs, cut pay for investment bankers, halted speculative trading in soft commodities and closed a profitable tax advisory unit.

A Barclays spokesperson declined to comment.

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