Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Paul Weightman is no stranger to high-profile corporate scraps.
The 62-year-old Australian, whose audacious poaching of more than 20 senior executives from asset manager Barings last month has already sparked litigation, spent 20 years running a property business that was involved in its fair share of takeover battles.
But it was his early career as a lawyer in Australian rugby league that provided the blueprint for the Barings raid, which has given Weightman a whole team of private credit experts for his nascent investment business Corinthia Global Management.
In the 1990s, he helped poach disaffected sports stars as part of the “Super League war” that upended Australian rugby league when Rupert Murdoch funded a new breakaway contest.
In an interview with the Financial Times, Weightman noted “similarities” between the sales pitch that was used then and Corinthia’s success in attracting an entire team of senior executives from Barings, which is owned by MassMutual, one of America’s biggest life insurers.
“Obviously they’re different industries, but if you’re going to recruit people to a new platform, it’s helpful to have a team excited by a bold new opportunity,” he said. “It’s a similar road map.”
Corinthia was publicly launched by Weightman only seven months ago to take advantage of the booming private credit market, which has grown to $1.7tn as many banks retreated from business lending after the financial crisis.
For Barings, which was well established in both the US and European markets, the mass defection has caused ructions at its $33bn private credit division.
It has been forced to pause new investments in some of its funds because of clauses related to the departure of key executives, while its US-listed private credit vehicle was last week deemed by Fitch Ratings to have a “negative outlook” because of “recent turnover in the direct lending team”.
Barings told the FT that while some of its funds had paused making investments, it “remains open for business and able to invest” through other vehicles such as its US-listed entity.
Last week, it announced it had made a new loan to executive networking company World 50 and while filings show it was already a lender to the company, a person close to Barings described it as a “net new investment”.
The poaching spree has also not been without consequences for Corinthia.
Barings won a preliminary injunction against the company and key employees in a North Carolina court last month. This imposed strict limitations on Corinthia in everything from soliciting Barings’ clients, to hiring Barings’ employees and making use of Barings’ confidential information.
But Weightman insists this has done little to slow down his new venture.
“The US guys were employed at will,” he said adding that they were due to start at Corinthia at the beginning of April. “The [others] will come on board as and when they have honoured their obligations.”
Weightman stepped into the private credit arena after his 2020 departure from Cromwell, the Australian real estate investment firm he founded two decades earlier, following a bitter boardroom battle.
He had met the co-head of Barings’ private finance group Adam Wheeler years earlier, when Wheeler worked at Australian firm AMP Capital, although Weightman said that this brief encounter had no bearing on his decision to swoop on the Barings team.
“I can’t say it was that memorable, as neither of us remembered it,” he said.
In its North Carolina lawsuit, Barings has accused Weightman of trying to buy its private credit operation “for pennies on the dollar”, citing an email he sent to MassMutual’s chair Roger Crandall warning that the departures would “create a range of issues” for Barings and attaching a term sheet offering to buy the credit business.
Weightman told the FT he was simply trying to “get to a negotiated position as quickly as possible”.
“Our view was to get everything on the table; have a discussion and make sure the lines of communication are open,” he said.
Evidence Barings has submitted as part of the lawsuit provides insight into Weightman’s hiring methods.
As early as August 2023 — some eight months before the exodus and a month before he even announced he was founding Corinthia — the Australian sent LinkedIn invitations and messages to key Barings executives who later defected, including Wheeler.
Barings has evidence of the messages because the employees had LinkedIn alerts connected to their work email addresses. It has alleged that Corinthia and two other defendants, former Barings employees Ian Fowler and Kelsey Tucker, “misappropriated and misused Barings’ confidential information to recruit Baring employees and attempt to set up a private credit business for Corinthia”.
In one instance, Weightman’s pitch to a senior Barings employee who later defected is preserved in full, offering them an “interesting private credit opportunity at Corinthia Global Management” and to send a non-disclosure agreement to a “private email address”.
Weightman told the FT he was untroubled by the fact that his direct approach meant Barings had evidence of how he had poached their staff.
“I thought it was better to talk to people directly than through headhunters,” he said. “I’m a front door sorta guy. I think it was effective and I’d do it again.”
Read the full article here
