Franklin Resources, Inc., also known as BEN, has commenced its business activities within Saudi Arabia, following the acquisition of two pivotal licenses from the nation’s financial authority, marking a significant step in its global reach.
The company has been granted a ‘Managing Investments and Operating Funds’ license along with an ‘Advising’ license by the Saudi Arabian Capital Market Authority.
This strategic expansion aligns with Saudi Arabia’s initiative to attract international firms to establish regional headquarters as part of its ‘Vision 2030’ economic reform plan.
“The Middle East is a strategic area for Franklin Templeton. We are thrilled to offer Saudi Arabian investors direct access to our global expertise via our comprehensive global platform and diverse market offerings,” stated Franklin’s executives.
Franklin’s international operations span across the United States, Europe, the Middle East and Africa (EMEA), Asia Pacific, Canada, and Latin America. As of December 31, 2023, BEN served clients in upwards of 150 nations, bolstered by approximately 1,300 investment professionals and managing $1.4 trillion in assets under management (AUM).
Over recent years, BEN’s growth trajectory has been shaped significantly by a series of strategic acquisitions. Notably, in January 2024, Franklin assimilated Putnam Investments, a prominent asset management entity, from Great-West Lifeco, which is anticipated to amplify Franklin’s retirement segment by boosting its defined contribution AUM to over $100 billion.
In 2022, BEN successfully completed the acquisitions of Alcentra and Lexington, along with several other transactions in the past, which have collectively fortified its presence in the separately managed account sector and have augmented its investment capabilities across private debt, real estate, hedge funds, and private equity. These initiatives are poised to enhance Franklin’s offerings in alternative investments and multi-asset solutions.
Such strategic moves have contributed to the steady increase in BEN’s AUM, which has seen a compounded annual growth rate (CAGR) of 18.7% over the prior five fiscal years, ending in fiscal 2023. The growth momentum carried forward into the first quarter of fiscal 2024. Additionally, Franklin’s diversification into asset classes in high demand, such as alternative assets, is expected to further drive AUM growth.
The company’s distribution model, with a focus on regional markets, has positively impacted its international business, yielding favorable net flows. Analysts project that Franklin’s AUM will exhibit a CAGR of 9.1% by fiscal 2026.
Other firms are also making expansionary moves. UBS Group AG has announced plans to expand its wealth management division in the United States over the coming years, primarily through mergers and acquisitions. These efforts underscore UBS Group’s determination to enhance its U.S. market share and its wealth management portfolio.
Similarly, Vinci Partners Investments Ltd. has entered into an agreement to acquire Compass Group LLC, which is expected to redefine the investment framework in Latin America. Upon regulatory approval, this acquisition will elevate VINP’s status in the region, boasting an AUM of more than $50 billion across various sectors.