Franklin Templeton is merging Alcentra into Benefit Street Partners, streamlining its private credit operations as scale becomes increasingly critical in the sector.

The combined business will operate under the Benefit Street Partners name and manage around $86bn in assets. Franklin Templeton said the move follows the integration of operations and distribution across the two units.

“BSP and Alcentra are complementary pioneers in alternative credit with long track records of successfully supporting investors through multiple market cycles,” said David Manlowe, CEO of Benefit Street Partners. “So this alignment under a unified brand is a natural next step for our combined global platform, which has become increasingly integrated in recent years and already shares world-class research, distribution, as well as operational teams and infrastructure.”

Alcentra, once a leading European direct lender, has faced challenges following leadership turnover and investment losses. Its direct-lending franchise will be wound down, with European coverage shifting to Apera, which Franklin Templeton acquired last year.

The merger reflects broader consolidation across the $1.7tn private credit market, as investors seek diversified strategies from fewer managers.

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