Franklin Templeton has agreed to acquire Alcentra, one of Europe’s largest credit executives, from BNY Hotel, as it is accelerating its push into one of the hottest areas of the asset management industry.
The San Mateo, California group announced on Tuesday that it will pay up to $ 700 million for London. AlcentraWhich has assets of $ 38 billion and invests in the entire range of alternative credit from high-yield bonds to debt sold by private companies.
The deal is the latest example of a mainstream asset manager betting on off-bond assets and traditional stocks in an effort to raise profits. Active executives such as Franklin TempletonWhich manages $ 1.5 billion, is under pressure from cheaper traded funds.
Franklin Templeton, which suffered heavy cash flows ahead of the 2020 acquisition of Leg Mason, was among the most aggressive buyers of alternative asset managers, a wide range of everything from infrastructure to real estate. Such asset management allows companies to charge much higher fees.
Alcentra, led by CEO John de Simon, was founded in 2002 and employs 180 people in offices in London, New York and Boston. It invests in senior secured loans, high-yield bonds, private credit, structured credit, special situations And multi-strategic credit strategies.
Franklin Templeton said its wide distribution network would give it an edge over smaller vendors as the products became more mainstream.
In November she acquired a private investment specialist Lexington Partners for $ 1.75 billion And alternative investments accounted for 10% of the assets managed prior to this transaction.
Jenny Johnson, Franklin Templeton’s president and CEO, said expanding to alternative European credit “is an important aspect of our alternative assets strategy”.
Franklin Templeton will pay $ 350 million in cash upon closing the deal and up to $ 350 million more if she meets a set of performance criteria over the next four years.
The explosive growth of private credit over the past decade also reflects the way banks have withdrawn from certain loans following the financial crisis, which allowed non-bankers to get in.
It came as investors Moved to diversify their stock portfolios and bonds After a period of volatility and lackluster performance.
Globally, alternative assets reached $ 15 billion and 15% of total assets under management last year. That is expected to rise to $ 22 billion, according to a recent report by Boston Consulting Group.
The deal will increase Franklin Templeton’s presence in Europe and double the assets managed by the investment manager of U.S. alternative credit expert Benefit Street Partners to $ 77 billion.
Franklin Templeton agrees deal for alternative credit specialist Alcentra Source link Franklin Templeton agrees deal for alternative credit specialist Alcentra