Franklin Templeton is merging its Alcentra unit into Benefit Street Partners, creating a combined private credit platform managing around $86bn in assets. The move consolidates operations under the Benefit Street Partners name, streamlining the asset manager's approach to a sector where scale is increasingly critical for competitiveness.

Alcentra, once a prominent European direct lender, has struggled with leadership changes and investment losses. Its direct-lending operations will be wound down, with European coverage shifting to Apera, a firm Franklin Templeton acquired last year. This consolidation reflects a broader trend of merger activity in the $1.7tn private credit market.

Investors are demanding more diversified strategies from fewer, larger managers. By unifying its platforms, Franklin Templeton aims to offer a more integrated global alternative credit solution. The integration follows years of shared research and operational teams, positioning the combined entity to better support clients through multiple market cycles.