Benefit Street Partners adds Encina team and $480m seed portfolio to ABF platform

Benefit Street Partners is adding a 14-strong Encina investment team and an initial seed portfolio of around $480m of commitments to its asset-backed finance platform. A new fund backed by Franklin Templeton and BSP-affiliated funds acquired the Encina-originated commitments, and the team will join BSP and continue to manage and originate investments through the strategy.

The Encina team provides senior secured, unitranche and first-out financing to consumer and commercial asset originators across the US and Canada, backed by diversified pools of underlying assets including consumer loans, credit card receivables and small business loans. BSP says the deal expands its capabilities in consumer and commercial lending as it builds a multi-strategy private asset-backed finance platform focused on the mid-market.

BSP says the combined ABF platform now has capacity to originate more than $3bn a year, following more than $10bn of investments completed since inception. “Investor demand for ABF continues to grow among a mix of institutional allocators,” said David Manlowe, chief executive of BSP. He said bringing in the Encina team is “a natural extension of our existing strategies” that broadens origination capabilities and the range of financing solutions.

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

BSP also added to its distribution team in September, hiring a global head of insurance and two managing directors.

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.