The media reported that Barclays Plc, a structure that includes a multinational investment bank and a financial services company, decided to strengthen its position in the private loan market by allocating money from its balance sheet to implement the corresponding efforts.
The pursuit of a financial institution to intensify its activities in the mentioned market is logical and justified from the point of view of economic interest since in this case, the lender seeks to gain a foothold in the functional space of $1.5 trillion.
Under the leadership of Emily Knickel, head of principal investing, based in New York, Barclays intends to acquire debt issued by the bank and participate in new financing organized by direct lending funds. The relevant information was published by the media.
The efforts of the financial institution, which is currently at the planning stage for implementation, are partly a reflection of a large-scale trend in the banking sector, which is that an increasing number of creditors are taking measures to ensure their own presence in the rapidly developing private debt area.
Private lending has already become a popular way to finance large-scale foreclosures. Against the background of this trend, traditional banks have found themselves at a disadvantage. The current situation is explained by the fact that private investment companies turn to asset managers for financing. Barclays understands this trend and acts according to the landscape that is relevant for the modern version of the financial sector. The bank started planning its entry into the private lending market last year.
Many companies, especially those firms that are under the control of private shareholders, turned to private creditors for funds at a time when the state of affairs, was fixed on the public markets, which was as far away as possible from the situation of guaranteed stability.
Barclays is one of the sponsors of the FinTech Growth Fund, a new investment fund based in the United Kingdom. Mastercard and the London Stock Exchange Group are also involved in this project.
Barclays is not the only major financial institution belonging to the category of universally recognized giants of the banking sector, which seeks to form a zone of its own presence in the expanding space of private lending. Other major lenders, including JPMorgan, Bank of Montreal, Capital One Financial, and Goldman Sachs Group, are also actively interested in this market.
JPMorgan has allocated $10 billion in funds to modernize its approach to direct lending. Bank of Montreal has partnered with Oak Hill Advisors, an investment firm, as part of a similar effort. Capital One Financial launched unitranche loans through a joint venture with HPS Investment Partners. Goldman Sachs Group provides lending services through its asset management unit.
In the summer, the media reported that direct creditors were interested in obtaining opportunities to operate in the European business space. These firms are aimed at meeting the demand for private lending in Europe. According to experts, alternative ways of obtaining loans are popular due to the fact that the mechanisms for providing relevant services have become more complicated in traditional banks and the level of their availability has decreased to a certain extent, which is an extremely negative factor from the point of view of consumer interests. At the same time, lenders whose activities are carried out within the framework of a conservative corporate policy are aware of this problem and demonstrate their willingness to solve it.
In March, the media reported on the intention of Wall Street financial institutions to start trading private credit loans.
As we have reported earlier, Barclays Bank Invests £3 Million in Trade Ledger.
