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Franklin Templeton raises $1.5B CFO for secondaries investors
The structured fund, called Structured Solutions 2026, issues rated debt tranches backed by cash flows from a pool of private-asset stakes and includes a Benefit Street Partners middle-market loan portfolio.
Franklin Templeton has raised a $1.5 billion collateralized fund obligation, using the structure to broaden access to secondaries investing returns for a wider range of investors, according to Yahoo Finance. The offering, known as Structured Solutions 2026, lets the asset manager issue multiple tranches of rated debt secured against cash flows generated by a diversified pool of private assets it manages.
The CFO provides exposure to returns from a mix of private equity fund stakes and continuation funds overseen by Franklin Templeton’s secondary-investing affiliate, Lexington Partners, the outlet said. Yahoo Finance added that the included collateral also contains a portfolio of US middle-market loans managed by Benefit Street Partners, Franklin Templeton’s direct-lending subsidiary.
The article notes that while CFO technology has existed for decades, it has expanded in the secondaries market over roughly the past 18 months. It cites that some of the largest secondary managers, including Ares Management, Carlyle AlpInvest, Ardian, and Blackstone, have explored or announced related activity as CFOs became more common.
Yahoo Finance also highlighted why insurers are a key target for the structure: the rated debt and its income stream from private assets can offer a pathway for insurance investors that may face regulatory barriers to direct investment in private equity funds. The piece points to heightened scrutiny in the industry, including updated guidance from the National Association of Insurance Commissioners that shifts the burden to insurers to demonstrate the structured products are supported by lender-borrower dynamics rather than an equity position disguised as fixed income.