Franklin Templeton's Johnson: Costlier Capital Will Slow Some Deals

Franklin Templeton Investments president and CEO Jenny Johnson said at the IPEM Global conference in Paris on Sept. 9, 2026 that a rising cost of capital will slow some activities, and discussed how the AI buildout is affecting private credit and the US economy.

Jenny Johnson, president and chief executive of Franklin Templeton Investments, told Bloomberg Television that a rising cost of capital will slow some activities, a blunt assessment from one of the largest publicly traded asset managers at a moment when private markets are still expanding into the space banks left behind.

Johnson spoke with Bloomberg's Guy Johnson at the IPEM Global conference in Paris, France, on Sept. 9, 2026, in an interview broadcast by Bloomberg Technology. Alongside her comments on funding costs, she addressed what the artificial-intelligence buildout is doing to private credit and to the wider US economy.

Why a chief executive's line on capital costs carries weight in Paris

IPEM Global is a gathering of private-markets professionals — the general partners who buy companies and lend to them, and the limited partners, such as pension funds and insurers, who supply the money. The cost of capital is the price of that money: what a borrower pays in interest, or what an equity sponsor must clear in returns to justify a deal. When it rises, the arithmetic on marginal transactions stops working. Deals that pencilled out at one discount rate do not pencil out at a higher one.

That is what Johnson's remark points at. She did not describe a freeze; she described a slowing of some activities. In practice that distinction matters enormously to the private-markets industry. A slower pace means longer hold periods for portfolio companies, delayed exits, more continuation vehicles and refinancings rather than clean sales — and a longer wait for limited partners hoping for cash back before they commit fresh capital.

For an asset manager, the read-through runs in both directions. Higher funding costs compress deal flow and can drag on fee-earning assets in the private-markets businesses that firms like Franklin Templeton have spent years assembling. But dearer capital also makes credit strategies more attractive on paper, because lenders are paid more for the same risk. Which effect dominates depends on how many borrowers can actually service the higher coupon.

The AI buildout has become a credit question

Johnson's second theme — the impact of the AI buildout on private credit and the US economy — is the one that has moved fastest in institutional conversation over the past year. The construction of data centers, the power infrastructure to feed them and the chips inside them is enormously capital-hungry, and a growing share of that capital is not coming from public bond markets or bank syndicates. It is coming from private credit funds, infrastructure vehicles and structured deals arranged directly between lenders and sponsors.

That shift concentrates a new kind of exposure. Private credit portfolios built for diversified middle-market lending increasingly hold assets whose value depends on a single technology cycle: whether demand for compute keeps growing fast enough to fill the capacity being built, and whether the tenants signing long leases remain creditworthy for the length of those leases. When the cost of capital rises at the same time, the projects that need the most leverage are the ones that get repriced first.

The macro side is the flip of the same coin. AI-related construction has been a visible contributor to US investment activity, and much of it is being financed rather than paid for out of cash flow. If capital gets more expensive, some of that spending is deferred — which is precisely the mechanism by which higher rates are supposed to cool an economy, only routed through data centers and substations instead of housing starts.

What the shares and the tape were doing

Franklin Templeton's listed parent trades under the ticker BEN. Its most recent close, as of 20:00 GMT on Sept. 8, 2026, was 34.65, down 0.23% on the day from a previous close of 34.73, with a session range of 34.47 to 34.95. That is a quiet tape for a stock in a business with plenty of moving parts — asset managers are geared to markets, flows and fee rates all at once, and a single-day move of that size says nothing about any of them.

The broader backdrop that day was mildly negative. The S&P 500, as tracked by SPY, closed at $765.96, down 0.55% from a prior close of $770.19. The Dow 30 proxy DIA fell 1.13% to $528.03. The Nasdaq 100 proxy QQQ was close to flat, ending at $718.36, down 0.08% from $718.96. In other words, the tech-heavy benchmark held up better than the industrial and broad-market indexes — a pattern consistent with capital continuing to crowd into the AI trade even as the rest of the market wobbles.

What to watch after IPEM

Johnson's comments are commentary, not guidance, and she attached no timetable or numbers to them. But they set up a short list of things that will show whether the slowdown she describes is arriving.

• Deal announcements versus refinancings. If private-equity activity tilts further toward extending existing structures rather than new buyouts, that is the cost of capital biting.
• Spreads on data-center and AI-linked private credit. Wider spreads on new lending would signal that funds are demanding more for concentrated technology exposure.
• Distributions back to limited partners. Cash returned to pensions and endowments is the constraint on the next fundraising cycle; slow exits mean slow fundraising.
• Fee-earning assets at the large managers. Public asset managers disclose these quarterly, and they are the cleanest read on whether private-markets momentum is stalling.

Investors should treat the split in Johnson's argument carefully. Saying that costlier money will slow some activities is not the same as saying the AI buildout stops, and it is not the same as saying private credit has a solvency problem. It is a statement about pace and about pricing — that at a higher hurdle rate, fewer projects clear it, and the ones that do pay more. For an industry that grew up in an era of cheap capital, that adjustment is the story of the next several quarters.

The structural shift behind the remark

The reason a comment like this lands at all is that private credit has moved from the fringe of corporate finance to its center. Loans that would once have sat on a bank's balance sheet or been syndicated into the public high-yield market are now originated and held by funds, priced privately and marked less frequently. That structure was tested only lightly in the low-rate years. A sustained rise in the cost of capital is the first real stress test of a market that has never been this large.

Johnson, running a firm whose fortunes rest on both public and private assets, has visibility into both sides of that shift. Her message from Paris was measured rather than alarmed — but the direction of travel she described is the one every allocator in the room is now underwriting for.

Key facts

• Speaker: Jenny Johnson, president and CEO, Franklin Templeton Investments
• Venue: IPEM Global conference, Paris, France; interview with Bloomberg's Guy Johnson
• BEN last close: 34.65, -0.23%, as of 20:00 GMT Sept. 8, 2026 (range 34.47–34.95)
• Benchmarks that session: SPY $765.96 (-0.55%), DIA $528.03 (-1.13%), QQQ $718.36 (-0.08%)

Frequently asked questions

What did Jenny Johnson actually say?

Speaking with Bloomberg's Guy Johnson at the IPEM Global conference in Paris on Sept. 9, 2026, the Franklin Templeton president and CEO said the rising cost of capital will slow some activities. She also discussed the effect of the artificial-intelligence buildout on private credit and on the US economy. She gave no specific forecast, timetable or figures.

What does 'cost of capital' mean in this context?

It is the price a business pays for money — interest on borrowings, or the return equity investors demand. In private markets, a higher cost of capital raises the hurdle a deal must clear to be worth doing. Transactions that worked at lower rates stop working, so activity slows even if appetite for assets remains intact.

Why does the AI buildout matter to private credit?

Data centers, power infrastructure and the equipment inside them require large amounts of financing, and a growing share of that money now comes from private credit and infrastructure funds rather than banks or public bond markets. That concentrates lenders' exposure to a single technology cycle and to the creditworthiness of the tenants signing long-term contracts.

How did Franklin Templeton's listed shares perform?

The ticker BEN last closed at 34.65, down 0.23% from a previous close of 34.73, with a session range of 34.47 to 34.95, as of 20:00 GMT on Sept. 8, 2026. The market was closed at the time of writing, so that is the most recent traded level rather than a live price.

Was the wider market up or down that session?

Mostly down. The S&P 500 proxy SPY closed at $765.96, off 0.55% from $770.19. The Dow 30 proxy DIA fell 1.13% to $528.03. The Nasdaq 100 proxy QQQ was nearly flat at $718.36, down 0.08% from $718.96, meaning technology-heavy exposure held up better than the broad and industrial benchmarks.

What should investors watch next?

Whether private-equity activity shifts toward refinancings and continuation vehicles instead of new buyouts; whether spreads widen on AI-linked private lending; whether cash distributions back to pension funds and other limited partners slow; and what large public asset managers report for fee-earning assets in their private-markets units.

Sources

• Franklin Templeton’s Johnson Says Cost of Capital to Slow Some Activities — Bloomberg Technology

Photo: Werner Pfennig · Pexels Licence — source