Franklin Templeton's acquisition of Alcentra, a European private credit firm, has encountered significant challenges since CEO Jenny Johnson celebrated the deal just over two years ago.

Alcentra, once a prominent player in the direct lending space alongside firms like Ares Management Corp. and Intermediate Capital Group Plc., has experienced a decline in its operations.

While competitors in the private credit market continue to expand their assets rapidly, Alcentra's performance has faltered, raising concerns about its future viability.

This serves as a cautionary tale for investors and industry observers, highlighting the changing dynamics within the sector.