Benefit Street Partners, Clarion Partners and Lexington Partners each had net inflows in the current quarter with a combined total of $1.4 billion. As we mentioned last quarter, in January, Lexington Partners closed its latest flagship global secondary fund with $22.7 billion of total capital commitments.
Fund 10 ranks among the largest funds raised to date and significantly exceeded Lexington’s private secondary fund, which closed with $14 billion in 2020, and we were delighted that approximately 20% of the capital raised in the fund came from the wealth management channel.
Also in January, Benefit Street Partners closed its 5th flagship private credit fund with $4.7 billion of total capital commitments, reflecting the strong demand for the asset class, BSP exceeded its fundraising target. We believe the current market opportunity and backdrop for U.S. direct lending and alternative credit in general is attractive, and BSP has significant underwriting experience, loan structuring expertise and focus on deep due diligence, which provides us with a competitive advantage.
In the wealth management channel, alternatives by Franklin Templeton has increased the number of product offerings and expanded platform placements, increasing market share and growing our client base. Our distribution force of more than 350 individual partners with our 50% group of alternative asset specialists to educate financial advisers and their clients on the potential benefits of private market investing.
We expect a busy next 12 months across private markets.
From an investment vehicle perspective, ETF AUM ended the quarter at $24 billion and generated net inflows of approximately $1.6 billion representing another quarter of net inflows exceeding $1 billion and the tenth consecutive quarter of positive net flows. SMA AUM ended the quarter at $138 billion and generated positive net flows of nearly $3 billion, representing the fourth consecutive quarter of net inflows.
Canvas generated net inflows of over $750 million with a robust pipeline and AUM increasing by 23% from the prior quarter to over $7 billion. Investment Solutions leverages our capabilities across public and private asset classes to pursue strategic partnerships. This quarter, Investment Solutions generated positive net flows with assets under management of over $75 billion, including the addition of Putnam.
This quarter, our institutional pipeline of one but unfunded mandates was $20 billion, a significant increase from the prior quarter and does not include the remaining allocation from Great-West Lifeco. The pipeline is one of the strongest it’s been and remains diversified by asset class and across our specialist investment managers.
With the close of our acquisition of Putnam on January 1, we are a $1.64 trillion investment manager. We’ve been pleased with the positive reaction from our clients and in the quarter, Putnam contributed positive net flows and its AUM increased by 8% to $160 billion or 18% since our announcement in May last year.
With our expanded capabilities, our AUM in the insurance and retirement channels now exceeds $650 billion. Putnam’s investment performance continued to be strong, with 89% or higher of mutual fund AUM outperforming peers in the 1-, 3-, 5- and 10-year periods and 91% of mutual fund AUM in funds that are rated 4 or 5 star by Morningstar.
We were also thrilled to see that Barron’s ranked Putnam the #1 fund family for 1- and 5-year performance and #5 for the 10-year period.
Since the closing, we’re also pleased to see that Putnam’s average monthly gross sales has increased by approximately 30%, demonstrating the strength of Franklin Templeton’s distribution.
Turning briefly to financial results. Adjusted operating income was $419.6 million, an increase of 0.6% from the prior quarter and a decrease of 4.7% from the prior year quarter.
As always, we continue to focus on disciplined expense management, while also continuing to invest in growth and innovation for the benefits of our clients and shareholders.
Before I turn the call over to you for your questions, I would like to thank our employees for their many contributions and always staying laser-focused on our clients’ financial future. Now let’s open it up to your questions. Operator?
Operator: [Operator Instructions]
One moment for your first question which will be from Craig Siegenthaler at Bank of America.
Craig Siegenthaler: First, we have a big picture net flow question. Lots of ins and outs in the $7 billion, especially with the $14 billion and from — Great-West. So how should we think about the core net flow run rate if we back the $14 billion out of the $7 billion of long-term net flows?
Jennifer Johnson: So Craig, thanks for the question. Let me — let me answer that question in first, kind of how we’re positioning ourselves, and I will — I promise you, I will get to those points and Adam can add some additional cover — color. So — the way we’re positioned the firm, I think of it as in 4 key secular trends that has driven our acquisition strategy and what we think will drive flows now and in the future. So the first obviously is our movement to alternatives. We think that it’s not going away, private credit is here to stay, banks are going to lend the same way that they’ve done in the past, private equity is here to stay. And so if you look at our breadth of capabilities from Lexington, Clarion, BSP, Alcentra we think we have the broadest alternatives capability of any traditional asset manager.
And from a flow standpoint, obviously well known in the institutional space, what’s really important is that the — in the wealth channel, there’s a desire to go from about a 5% allocation to a 15% allocation. And what’s significant there, if you just take the 4 biggest wire houses a 1% increase in allocation is $130 billion. And what we’re excited about is that as we mentioned in the prior comments and opening comments, Lexington’s that fundraise was in the wealth channel. And believe me, that was years of learning starts and stops in blocking and tackling, learning about education, educating our own team, educating the advisers who are selling to be able to be successful in that. And we think we can take that same strategy with any of our alternatives.
