Nick Dignam from Fortitude Investment Partners shares insights with Lachlan Maddock from Fortitude Investment Partners on how a diversified portfolio in mid-market private equity is structured. The Inside Adviser
The world of alternative investments is at a crossroads. As markets defy expectations and liquidity concerns take centre stage, investors find themselves forced to rethink how they deploy capital in an increasingly complex environment.
Franklin Templeton expands alternatives, credit capabilities
Franklin Resources, the parent company of Franklin Templeton, a global asset manager with over US$1.5 trillion ($2 trillion) in assets under management, has bought private debt manager Alcentra from BNY Mellon.
With an upfront cost of US$350 million ($479 million) and a further US$350 million ($479 million) in earn out possibilities, the group will bring US$38 billion ($52 billion) in assets into Franklin’s Alternative asset group, called Benefit Street Partners. After the deal, the group will grow to US$77 billion ($105 billion), with Franklin’s broader alternative capabilities hitting US$257 billion ($352 billion) and represents a significant acceleration in its expansion into alternative asset classes.
Owned by BNY Mellon, a leading custody, administration and wealth management group, Alcenta is one of Europe’s largest credit and private debt managers, with expertise spanning senior secured loans, high-yield bonds, private and structured credit and distressed debt. The deal comes at a time when investors from all parts of the industry are seeking the diversification and income benefits of alternative asset classes.
Commenting on the deal, Jenny Johnson, president and CEO of Franklin Resources said, “Alternative investments represent a significant diversification tool for our clients and an area of increasing importance for both individual and institutional investors. We have been deliberate in building our alternative asset management capabilities over recent years and the acquisition of Alcentra is an important aspect of our alternative asset strategy – the expansion into alternative European credit.”
Alcentra will continue with the “discipline, value-oriented approach” to assessing opportunities, currently servicing more than 500 institutional investors. The group will be “highly complementary” to the Benefit Street Partners group, according to CEO Tom Gahan, who highlights the fact that there is no overlap in the region.
BNY Mellon will continue to offer access to Alcentra in its sub-advised funds and Franklin will continue using its custody services.
