The Scoop
Benefit Street Partners, the $92 billion private credit manager owned by Franklin Templeton, is looking to expand into the Gulf region despite the outbreak of war with Iran a month ago.
The firm is considering entering the region through a partnership with a local bank or fund, or alongside Franklin Templeton, Chief Executive David Manlowe of BSP told Semafor in an interview.
“We are actively progressing various options that enable us to supply private capital into the region, whether in partnerships or JVs, alongside Franklin Templeton with all their infrastructure and 25-plus years in the region, or on our own as BSP,” he said.
The war with Iran has “no impact on our excitement about going all in on the region,” Manlowe said. “We’re thinking about the future in decades.”
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The Gulf has become an important source of capital for the world’s biggest asset managers, giving the region influence over firms to do more in the Gulf than just take money out of it.
BlackRock, Brookfield, and KKR are among firms that have boosted their presence in the region. Franklin Templeton last year agreed to partner with Saudi’s Public Investment Fund to invest $5 billion in the kingdom.
Manlowe said Franklin Templeton’s deep relationships with Gulf investors will help BSP build a lending business in the region. The firm will be riding a wave of increased demand for private credit, he said, pointing to data centers, infrastructure projects, and corporates as all needing to raise significant amounts of capital.
Demand for private credit has picked up in the Gulf as banks have typically been cautious about lending to small businesses or companies in high growth industries like technology. In Saudi Arabia, banks are also dealing with tight liquidity. Everyone from Goldman Sachs to Apollo have been exploring private credit opportunities over the past few years.
The Middle East private credit market is still developing, but should grow steadily over the next few years, sparking interest from global investors in the space. “I could see there would be substantial investor demand for a Middle East fund, if we decided to go ahead and raise one,” Manlowe said.