Franklin Templeton set to explore more options in GCC markets

Franklin Templeton, a leading global investment manager with operations in the Dubai International Financial Centre, sees bright prospects for its business and plans to strengthen its position in its core markets in the GCC region, its top official says.

Jenny Johnson, president and CEO of Franklin Templeton, said its business has shown resilient performance this year despite challenges posed by the Covid-19 pandemic.

“The GCC is an important market for our business. We are strengthening our retail and institutional capabilities locally and see ourselves as a core player servicing sophisticated institutional clients like central banks, sovereign wealth funds and pension funds, as well as local and international banks,” Johnson told Khaleej Times in Dubai in an exclusive interview during her first official trip outside the US after the pandemic.

She was joined by Julian Ide, head of Franklin Templeton’s EMEA distribution, and Sandeep Singh, regional head for CEEMEA and Head – Islamic Business at Franklin Templeton.

Franklin Resources, a global investment management organisation with subsidiaries operating as Franklin Templeton, has been serving clients in over 165 countries for more than 70 years. With offices in over 30 countries and approximately 1,300 investment professionals, the California-based company had over $1.5 trillion in assets under management as of August 31, 2021.

UAE among region’s core markets

Singh, based in Dubai, said the UAE, Saudi Arabia and Kuwait are among the leading markets in the region for Franklin Templeton.

“We are proud of our longstanding presence in the region. We have just recently celebrated our 20-year anniversary in the UAE and as the asset management industry continues to evolve, we are looking forward to capitalise on business opportunities in the region,” he said.

“Franklin Templeton has a strategic vision to strengthen its position in the UAE, GCC and other parts of the Middle East. We want to replicate the UAE business success model in other markets of the region,” he said.

Dubai a financial hub

Ide commented that Dubai continues to grow as an international financial hub and demonstrated a successful strategy to contain the Covid-19 pandemic.

“The Middle East is a material percentage of Franklin Templeton’s EMEA business and Dubai is becoming increasingly strategically important, particularly for wealth management. Expo 2020 is just one part of this,” he added.

Johnson further elaborated, saying the Expo 2020 Dubai will drive business momentum in the region by attracting more tourists, businessmen and investors to the region.

“Expo will further charge positive sentiments among the corporate world and help resume economic activity in the region and globally,” she said.

Helping the clients

Johnson said Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. “The company brings extensive capabilities in equity, fixed income, multi-asset solutions and alternatives through its specialist investment managers in key markets across the world,” she said.

“We offer Shariah-compliant products to our clients in the region as Franklin Templeton is one of the few global asset managers, which manages Shariah-compliant strategies for investors worldwide,” she added.

She added that with some key acquisitions completed over the last 12 months, the company now has a 50 per cent split between institutional and retail clients. The GCC has over 70 per cent of its business sourced from institutional clients while the remaining are under retail and high networth individuals.

Franklin Templeton’s recently acquired Legg Mason, Aviva Investors, Athena Capital, Pennsylvania Trust and AdvisorEngine.

“Our specialist investment manager’s Brandywine Global also acquired Diamond Hill Capital Management. We have most recently announced plans to acquire O’Shaughnessy Asset Management,” she added.

Demand for fixed income products

Ide and Singh noted the local business continues to see strong demand for global fixed income products, with growing interest for ESG strategies.

“We have just concluded our financial year on September 30 with six acquisitions including a $4.5 billion Legg Mason deal that will deepen Franklin Templeton’s presence in key geographies and create a platform well balanced between institutional and retail clients. We have over $6.4 billion in cash on our balance sheet and if the right opportunities come up - we’re still buyers,” Johnson elaborated.

“In the GCC, we are very excited about the opportunities we have here as a combined business. From a cultural standpoint, the integration of Franklin Templeton and Legg Mason has been incredibly harmonious, and we are seeing a lot of momentum from clients,” added Ide, who came from Legg Mason’s Martin Currie.

While referring to its latest acquisition of a leading quantitative asset management firm O’Shaughnessy Asset Management, Johnson said this will help build up Franklin Templeton’s offerings in the high growth separately managed account (SMA) industry.

“The latest transaction will serve as an important expansion and enhancement of Franklin Templeton’s existing strengths in SMA and custom solutions capabilities. It will bring compelling benefits to clients,” she added.

Gender equality, diversity

Johnson, who won Financial Woman of the Year title this year from Financial Women of San Fransico, said Franklin Templeton is advancing its efforts toward achieving gender equality in the financial services industry.

“I firmly believe that the inclusion of colleagues from diverse backgrounds, perspectives and identities leads to better decision-making and problem-solving across our business. Indeed, there is a direct link between innovation and diversity, which drives greater economic and social returns,” she added.

“The asset management industry offers good opportunities for women and I strongly believe that women can grow and thrive in this industry,” she said.

Johnson further elaborated that gender equality and diversity can play an important role in business growth in today’s competitive environment. Last year, Franklin Templeton created a position of chief diversity and inclusion officer to promote more diversity within the organization.

Work from home

Johnson said that having the flexibility to work from home will likely be a feature that corporate entities continue to consider in the coming years.

“About 97 per cent of Franklin Templeton staff started work from home within two weeks when the pandemic hit the global markets. We quickly moved to a new working model and had a resilient performance despite the challenging environment,” she said.

“With all Covid-19-related decisions, the firm continues to prioritise the safety and well-being of our employees. Taking local conditions into account, many of our offices are open to varying degrees, however the vast majority of our employees continue to work from home. While we are planning for a gradual return to office in greater numbers we are not envisioning a “one size fits all” approach for work arrangements. Franklin Templeton’s flexible work culture included remote work arrangements prior to the pandemic, and that will continue even after we return to the office.”