NEWS

Barings Granted Injunction Against Former Employees It Says Poached Firm’s Private Credit Talent

Investment manager Barings won a preliminary injunction last week that will prevent a team of recently departed private credit professionals from taking proprietary and confidential information belonging to the firm for the benefit of rival Corinthia Global Management.

Chamath Palihapitiya, founder and CEO of Social Capital.

The injunction, granted Friday, comes four days after Barings, a subsidiary of MassMutual, filed a lawsuit against Corinthia Global Management and former employees Ian Fowler and Kelsey Tucker—pushback after the Nomura Holdings-backed direct lender recruited over 20 employees from Barings, according to a report by Bloomberg.

Fowler previously co-led the global private finance group at Barings until March 8, while Tucker served as Global Head of Operations until his departure in January 2023.

Corinthia officially launched last Thursday, with much of its initial staffing comprised of employees from Barings’ London and US offices.

The lawsuit alleges Fowler and Tucker engaged in “disloyal acts and blatant disregard of the fiduciary and contractual obligations of the most senior employees in Barings' Global Private Finance group,” including the misuse of confidential information in support of Corinthia’s employee poaching.

The suit described the alleged acts as “one of the largest corporate raids at an asset manager in years” and seeks compensatory and punitive damages, along with attorney’s fees. Underlining the importance of top talent retention, the suit highlights what Barings sees as intense competition for private credit investment professionals as the asset class continues its rapid growth.

In addition to monetary damages, Barings is also seeking a halt to further recruitment of its employees, what it calls illegal poaching, and to block solicitation of the firm’s customers.

Efforts to reach Fowler, Tucker, and Corinthia Global Management were unsuccessful.

Upon filing the suit, a Barings spokesperson told Bloomberg that “Barings has today commenced legal proceedings seeking a temporary restraining order and preliminary injunction to prevent them from continuing to target our clients and employees, and stop the ongoing misappropriation of our trade secrets and confidential information.

“This legal action has been taken as a result of the defendants’ blatant disregard of their fiduciary and contractual obligations, which goes against Barings’ codes of conduct and ethics.

“Barings will not sit idly by and allow the defendants’ misconduct to occur.”

After filing the suit, Barings appointed Bryan High as Head of Global Private Finance; Eric Lloyd as Chairman of the same division; Tyler Gately as Head of Private Credit in North America; and Stuart Mathieson as Head of Private Credit in Europe and Asia-Pacific.

Barings will also pause new investments across certain private credit funds because of the departures and leadership transition, according to another report by Bloomberg. Additionally, Bloomberg reported that the company issued a letter saying that “In accordance with and as permitted by the fund documents, we will continue to call capital to pay down financing facilities, to honor previously committed or approved deals, add-ons or unfunded facilities, or for expenses.

“For our commingled private funds and our private segregated funds, regardless of whether a key person event has been triggered, we are pausing on making brand new investments while we continue the transition to new investment leadership. We will continue to fund existing commitments.”

While certain private credit funds are paused, the firm will still invest across other vehicles, including its business development company and various North American, European, and Asia-Pacific-focused funds.

Neil Steiner, an attorney with Dechert LLP who is representing Barings, and a clerk from Mecklenburg County Clerk of Superior Court both said the next court date in the case has not yet been scheduled.

Bob Clair

Bob Clair is a reporter at Transacted covering private equity and investment banking. He has covered breaking M&A news for several years and is a general assignment freelance reporter for The New York Times, where he shared in a 2021 Pulitzer Prize win.