Franklin Templeton Investments, the the San Mateo, California-based, New York-listed global asset manager, has agreed a deal to acquire Edinburgh Partners, a Scottish boutique asset manager founded in 2003 by a former Templeton Global Equity Group portfolio manager, research director and executive vice president, Sandy Nairn (pictured below).
The cost and other financial details of the transaction weren’t immediately given, in a statement issued issued by Franklin Templeton on Wednesday. The deal is subject to regulatory approvals and is expected to be completed in the first half of 2018, Franklin Templeton said.
The deal is the latest in a series of acquisitions in the asset management industry that have taken place over the past 12 to 18 months, as lower returns and increased regulations have driven consolidation, particularly among smaller and mid-sized firms. As reported, a just-published Moody’s Investor Service note predicted that what it called “margin squeeze” would drive further consolidation across Europe’s asset management industry in particular, in the wake of the MiFID II reforms, which took effect on 3 January.
At the end of December Edinburgh Partners had around US$10bn (€8.18bn) in assets under management, invested in global and emerging market equities across four strategies, according to the Franklin Templeton statement. It employs 12 people and has offices in London and two in the US in addition to its headquarters in Edinburgh.
Under the terms of the deal, Nairn will become chairman of Templeton Global Equity Group, which was looking after around US$101bn in assets at the end of December, while remaining investment partner and chief executive of Edinburgh Partners. He will report to Stephen Dover, Franklin Templeton’s head of equities.
Jenny Johnson, president and chief operating officer of Franklin Resources, said the asset manager was “pleased to welcome back Dr Sandy Nairn to our organisation”.
Noting that he had worked alongside Franklin Templeton’s late founder, Sir John Templeton, and had been employed by Franklin Templeton for more than a decade, she added: “he brings [back to Templeton] 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.
“This is the latest example of the firm continuing to make strategic investments in relatively small, yet highly experienced asset management teams that complement Franklin Templeton’s global offerings.”
Franklin Templeton was created in 1992 by the acquisition of fund manager Templeton, Galbraith & Hansberger by publicly-traded Franklin – named after American founding father Benjamin Franklin –but its origins date back decades earlier. John Templeton is remembered for having been a pioneer in investing in emerging markets as early as the 1950s, after making large profits on the US stock markets as the American economy recovered from the Great Depression.