Asset manager consolidation continues as Franklin Templeton swallows up Edinburgh Partners

 
Lucy White
BRITAIN-EU-POLITICS-BREXIT
Based in the Scottish capital, Edinburgh Partners has $10bn under management (Source: Getty)

The big fish of the asset management world are continuing to hunt down their smaller rivals, as Franklin Templeton Investments today announced it is set to buy Edinburgh Partners.

The Scottish asset manager, which currently manages around $10bn (£7.2bn), is speculated by market sources to have sold for a value in the region of £200m.

New York-listed Franklin Templeton, which in turn had $753 billion under management as of December, will welcome Edinburgh's chief executive and co-founder Sandy Nairn back into its fold – Nairn was employed by the firm for more than a decade, and worked alongside the legendary investor Sir John Templeton.

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"[Nairn] brings a tremendous amount of leadership experience and expertise in managing global and international equities, an area that continues to be of strong interest to our clients around the world," said Jenny Johnson, chief executive of Franklin Templeton's parent Franklin Resources.

Based in the Scottish capital, with an office in London and two in the US, Edinburgh manages two London-listed investment trusts and offers fund management services to a range of institutional clients.

It has 12 investment professionals as opposed to Franklin Templeton's 650 across all its strategies.

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Nairn will become chairman of the Templeton Global Equity Group, while remaining an investment partner and chief executive of Edinburgh. The Templeton equities division manages over $101bn.

John Templeton, whom Nairn previously worked under, became famous for buying up cheap US stocks in the Depression of the 1930s and benefiting from their rise when World War II caused industry to pick up.

The deal between Franklin Templeton and Edinburgh Partners comes at a time when asset managers are coming under increasing pressure. Regulatory pushes towards greater transparency have put firms on the back foot, while technological developments and the rise of passively managed "tracker" funds are forcing managers to lower their fees to stay competitive.

Aberdeen Asset Management merged with Standard Life Investments last year, while the Janus Henderson merger also completed in 2017.

Read more: Janus Henderson fund inflows bounce back as post-merger cost cutting continues

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