| From | Franklin Templeton Investments |
|---|---|
| Contact | Joe Marassa |
| Telephone |
(02) 9250 2208 |
10/25/2018
SAN MATEO, Calif., Oct. 25, 2018 (GLOBE NEWSWIRE) -- Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments (“Franklin Templeton”), today announced that it has entered into an agreement to acquire Benefit Street Partners L.L.C. (“BSP”), a leading alternative credit manager with approximately $26 billion in assets under management as of September 30, 2018. The acquisition will bolster Franklin Templeton’s alternative offerings and expand its robust fixed income capabilities to include an array of alternative credit strategies, at a time when investors are increasingly allocating capital to less liquid and higher yielding credit opportunities.
“We’re pleased to announce the acquisition of Benefit Street Partners and to welcome its seasoned and talented team,” said Greg Johnson, chairman and CEO of Franklin Templeton. “BSP’s differentiated approach to investing within the alternative credit space has resulted in a thriving business over the course of the last decade. The percentage of institutional investors expected to allocate to alternative credit for the long term is substantial, and this acquisition positions us well in a growing market. We are confident that BSP’s experience and capabilities, combined with Franklin Templeton’s global scale and extensive resources in more liquid credit investing, will enhance origination capabilities and increase our breadth and depth of expertise across the leveraged finance market.”
Established in 2008, BSP is based in New York, with five additional offices across the US. BSP offers a broad spectrum of investment capabilities to its investors, covering corporate performing and distressed private credit, structured credit and commercial real estate credit. The alternative credit asset class is seeing strong demand in a rising rate environment, with BSP generally focusing on high quality, primarily senior secured, floating rate debt. BSP’s senior management team has worked together for over two decades, at BSP and at another organization, and is supported by a deep bench of strategy leaders, portfolio managers and investment professionals with significant experience building institutional-quality businesses that have delivered strong results through multiple market cycles.
Tom Gahan, founder, CEO and CIO of BSP, said, “We believe Franklin Templeton is the perfect long-term partner for our business. Franklin Templeton’s pedigree, global reach and extensive investment capabilities will provide BSP with increased resources and investment opportunities. We look forward to collaborating with Franklin Templeton’s experienced team to continue to deliver market-leading risk-adjusted returns to our investors. We are grateful to our partners at Providence, who helped launch and support BSP over the past decade.”
Jenny Johnson, president and COO of Franklin Templeton, added, “Expanding our alternatives capabilities has been a strategic focus area for Franklin Templeton, and this acquisition will position us to capitalize on the growing and sought after alternative credit segment. We’re consistently seeing investors augment their traditional fixed income portfolios with alternative credit to enhance their risk/reward characteristics. BSP brings new alternative solutions within private credit that complement Franklin Templeton’s existing alternatives and fixed income capabilities to meet the evolving needs of our clients.”
Jonathan Nelson, founder and CEO of Providence, said, “BSP’s combination with Franklin Templeton makes strategic and economic sense for all stakeholders. We couldn’t be more proud of Tom and the team’s success in building a world-class credit business. This has been a great 10-year partnership, and we wish them continued success.”
This transaction is subject to customary closing conditions and we anticipate the transaction will close in Franklin Templeton’s second quarter of fiscal 2019. Following the acquisition, Franklin Templeton’s alternative offerings will represent more than $40 billion in assets under management.
Morgan Stanley & Co. LLC served as financial advisor to Franklin Templeton, and its legal counsel was Willkie Farr & Gallagher LLP. BofA Merrill Lynch served as BSP’s financial advisor on the transaction, and Skadden, Arps, Slate, Meagher & Flom LLP was its legal advisor.