Benefit Street Partners (BSP), Franklin Templeton’s global alternative credit arm, has expanded its asset-backed finance (ABF) platform through a deal with private credit firm Encina Lender Finance.

Under the deal, a new fund backed by Franklin Templeton and BSP-affiliated funds has acquired an initial seed portfolio of around $480m (£364.3m) of commitments originated by Encina.

A 14-strong investment team from Encina will also join BSP, where it will continue to manage and originate investments through the strategy, the alternative manager said.

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“This transaction demonstrates the strength of our model: combining specialised investment expertise with Franklin Templeton’s global scale and distribution to build differentiated investment solutions for clients,” said Jenny Johnson, chief executive of Franklin Templeton.

“With over $300bn in alternative assets under management, we believe there is significant opportunity to continue scaling our private markets capabilities globally.”

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BSP said the deal expands its capabilities in consumer and commercial lending as it looks to build out a multi-strategy private ABF platform focused on the mid-market.

Having completed more than $10bn of investments since inception, BSP believes the combined ABF platform now has the capacity to originate more than $3bn a year.

“Investor demand for ABF continues to grow among a mix of institutional allocators,” said David Manlowe, chief executive of BSP.

He added: “Adding the Encina team is a natural extension of our existing strategies and broadens both our origination capabilities and the range of financing solutions we can provide.”

The Encina team provides senior secured, unitranche and first-out financing to consumer and commercial asset originators across the US and Canada. Its investments are backed by diversified pools of underlying assets, including consumer loans, credit card receivables and small business loans.

Franklin Templeton manages $1.8tn in assets, including more than $300bn in alternatives, of which around $97bn is managed by BSP.

Willkie Farr & Gallagher and Simpson Thacher & Bartlett acted as legal counsel to Franklin Templeton and BSP. Berkshire Global Advisors was financial adviser to Encina Lender Finance, with Mayer Brown and Winston Taylor acting as its legal counsel.

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