Private equity pioneer Thomas H. Lee and institutional investors are backing newly formed AGL Credit Management, a private credit investment firm that aims to produce high-single-digit returns.
AGL, led by CIFC’s former chief executive officer Peter Gleysteen, will invest in corporate loans, according to a statement from the firm Monday. The firm’s strategy will include forming collateralized loan obligations, which pool leveraged loans and slice them into pieces of varying risk and return.
New York-based AGL is backed by Abu Dhabi Investment Authority, a large U.S. state pension fund, and Lee’s family office. Abu Dhabi’s wealth fund committed $500 million of equity to the new firm, while the U.S. pension fund will invest $150 million, according to the statement.
“Few fixed income products truly target the return objective of institutional investors,” Gleysteen, AGL’s CEO and chief investment officer said in the statement. “AGL was expressly formed to fill this void in the fixed income solution set.”
AGL’s stable return strategy will allow CIOs and fixed-income investors “to invest in size, and provide the kind of reliable, repeatable income streams that many global institutions seek,” Lee, AGL’s non-executive chairman, said in the statement. The strategy will deliver an “absolute return,” as opposed to total return strategies that focus on price appreciation for gains, according to AGL’s website.
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Lee founded Boston-based private equity firm Thomas H. Lee Partners in 1974, running the firm until 2006. He then formed a New York-based buyout firm Lee Equity Partners, where he serves as chairman. Lee said he will help shape AGL’s long-term business strategy.
AGL co-founder Gleysteen is well known in the leveraged loan industry.
He founded CLO manager CIFC in 2005, stepping down as CEO in 2014. He previously worked at JPMorgan Chase & Co., where he was responsible for the bank’s global loans syndication business.
