Franklin Templeton to purchase Legg Mason
The merger will give the new business more than $1.5 trillion in assets under management.
19th February 2020 10:33
by Tom Bailey from interactive investor
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The merger will give the new business more than $1.5 trillion in assets under management.
In the latest asset management mergers, Franklin Templeton has agreed to purchase Legg Mason for $4.5 billion.
The merger will give the new business more than $1.5 trillion in assets under management.
Both companies are US based asset managers. However, both run several funds and trusts which are popular among UK investors, including Franklin Templeton Emerging Investment Trust (LSE:TEM), previously managed by star manager Mark Mobius, and Legg Mason's Japan Equity Fund.
The new company will be under the control of Franklin Templeton’s current chief executive Jenny Johnson. For now, however, there appears to be little risk of either of the fund houses’ funds being closed due to crossover.
In a statement on the decision, Franklin Templeton said Legg Mason and its affiliates will remain autonomous, “ensuring that their investment philosophies, processes and brands remain unchanged”.
Joseph A. Sullivan, chairman and chief executive of Legg Mason, noted:
“By preserving the autonomy of each investment organisation, the combination of Legg Mason and Franklin Templeton will quickly leverage our collective strengths, while minimising the risk of disruption. Our clients will benefit from a shared vision, strong client-focused cultures, distinct investment capabilities and a broad distribution footprint in this powerful combination.”
The move comes after a string of asset manager takeovers. As we reported yesterday (17 February), Jupiter Asset Management announced that it will take over Merian Global, in a move that would make Jupiter Asset Management the second-biggest fund house in the UK.
Meanwhile, November 2019 saw Premier and Miton merged, while in October of the same year Liontrust purchased the smaller fund house Neptune. There have been other notable fund management mergers over the past couple of years, including Standard Life Aberdeen (LSE:SLA).
The trend can be traced back to the increased pressure that active management fund houses have faced following the rise of passive investment after the 2008 financial crisis. In a bid to benefit from economies of scale, the number of mergers per year of publicly traded asset managers doubled globally between 2009 and 2018, according to a study from Deloitte Casey Quirk.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.