Franklin Resources on Thursday announced it agreed to acquire alternative credit manager Benefit Street Partners from private equity firm Providence Equity Partners.

Franklin will pay $683 million in cash for the deal, of which $130 million will be used to retire Benefit Street debt, a Franklin spokesman said.

The acquisition of Benefit Street, with $26 billion in assets under management, will increase Franklin's overall alternatives AUM to $40 billion upon the deal's closing, expected in the second quarter of 2019, Franklin said in a news release. Franklin had $717.1 billion in AUM as of Sept. 30.

The acquisition will bolster Franklin Templeton's alternative offerings "at a time when investors are increasingly allocating capital to less liquid and higher yielding credit opportunities," according to the release.

Thomas Gahan, Benefit Street founder, CEO and CIO, will continue in that role, and Benefit Street will operate with its existing investment team and name after the deal closes, the spokesman said.

Morgan Stanley advised Franklin on the deal, while Bank of America Merrill Lynch advised Benefit Street.

The deal is the latest acquisition for Franklin, which closed on its purchase of global value manager Edinburgh Partners earlier this year.