N.C. State Treasurer Acquires Majority Stake in Franklin BSP Real Estate Debt BDC
In a private transaction, the treasurer of the state of North Carolina, acting on behalf of state employee benefit plans, including pension funds, has acquired a controlling interest in Franklin BSP Real Estate Debt BDC, a non-traded business development company.
The acquisition, completed earlier this month from investment funds advised by a Franklin affiliate, involved 20,167,415 common shares, representing approximately 99.99% of the BDC’s outstanding common stock. The state paid $26.39 per share, or about $532.2 million in total.
The price represents a discount of about 3.5% to the BDC’s most recently reported net asset value of $27.34 per share as of June 30, 2025, according to Robert A. Stanger & Company Inc.
Franklin BSP Real Estate Debt BDC, founded in 2024, is a business development company that specializes in debt and equity investments within the commercial real estate sector. Its primary focus is on generating income and capital appreciation through a portfolio of senior secured commercial real estate loans, particularly in the middle market. Loans range from $25 million to $100 million, across a mix of asset classes, with a focus on multifamily lending. To a lesser extent, the company said it may invest in, or originate, subordinated debt, commercial mortgage-backed securities, or CMBS, and collateralized loan obligations, or CLOs.
The company operates as an “emerging growth company” and was managed by Benefit Street Partners, or BSP, a subsidiary of Franklin Templeton.
Previously reported by AltsWire, Franklin BSP Lending Corporation and Franklin BSP Capital Corporation — both non-traded BDCs managed by affiliates of Benefit Street Partners — merged in January 2024. Franklin BSP Capital Corporation was the surviving entity. In connection with the merger, Lending Corporation stockholders received 0.4647 shares of newly issued Capital Corporation common stock for each share of Lending Corporation common stock. As a result of the merger, legacy Capital Corporation stockholders and former Lending Corporation stockholders owned approximately 19.3% and 80.7%, respectively, of the combined company.
The combined company reported just over $1.31 billion in total assets as of June 30, 2025, and approximately $551.3 million in total net assets. This was more than a 1,100% increase and a 420% increase from the roughly $109.3 million in total assets and approximately $106 million in total net assets reported one year prior.
As of the end of June 2025 and Dec. 31, 2024, the company had investments in 61 loans and five real estate securities across five industries and investments in 37 loans and three real estate securities across six industries, respectively. Based on fair value as of those dates, about 99.6% and 99.3% of the loan portfolio was invested in floating-rate debt, most with secured overnight financing rate floors.
In a filing with the U.S. Securities and Exchange Commission, the treasurer indicated plans to work with the company to redeem its outstanding preferred shares, withdraw its election as a BDC, and deregister its common shares.
The acquisition positions North Carolina’s pension system to take direct control of a large, income-producing commercial real estate credit vehicle at a slight discount to NAV, while providing Franklin-affiliated funds with a full exit.
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