Top Barclays investor will back fundraising plan

LONDON (Reuters) - A top investor in Barclays said on Thursday it would back the bank's controversial fundraising plan despite voicing concerns.

Barclays has faced a backlash among some shareholders who are unhappy that investors in Qatar and Abu Dhabi have been offered attractive terms to provide the bank with 5.8 billion pounds of capital.

Barclays investors are due to vote on Monday on plans to raise cash from the sale of complex capital instruments.

News reports had said top investors Legal & General (L&G) Investment Management and Aviva Investors may vote against the plan, intended to help the bank repair damage from the global financial crisis and avoid taking government rescue funds.

L&G Investment Management said in a statement on Thursday it regretted Barclays had decided to raise the capital "without due consideration of its impact on existing shareholders and on terms that we consider to be expensive."

Expressing deep disappointment with the financing deal, L&G Investment Management Chief Executive Peter Chambers said in the statement that normal policy would have been "to advise our clients to vote against the proposed capital raising.

"However, in this case, we recognise that in these exceptional circumstances, a failure to secure this capital could lead to a material detriment in shareholder value. As a result, where we have discretion from our clients, we will vote in favour of the plan," he added.

L&G Investment Management owns about 5 percent of Barclays, according to reports.

Chambers said that, in future, L&G Investment Management would advise its clients to vote against capital raisings that disregarded pre-emption rights -- shareholders' traditional right to first refusal on funding.