Franklin Templeton to Acquire O’Shaughnessy Asset Management, a Leading Custom Indexing Provider through its Canvas® Platform

Rhea-AI Summary

Franklin Resources, Inc. (NYSE:BEN) announces its acquisition of O’Shaughnessy Asset Management (OSAM), enhancing its position in the separately managed account (SMA) sector. With $130 billion in SMA assets under management, this acquisition adds OSAM’s $6.4 billion AUM and innovative Canvas® platform, supporting factor-based and custom indexing solutions. The deal is expected to improve client services through tailored investment strategies and is set to close in Q4 2021, pending customary conditions.

Positive

• Acquisition enhances OSAM's $6.4 billion AUM and Franklin Templeton's $130 billion SMA assets.
• Canvas® platform expected to drive growth in custom indexing and factor-based investing.
• Strengthens Franklin Templeton's position as a leader in the SMA market.

Negative

• None.

Acquisition Reinforces Franklin Templeton’s Position as a Top Separately Managed Accounts Provider and Enhances Its Tax Management, Factor-Based and ESG Customization Capabilities

SAN MATEO, Calif.--(BUSINESS WIRE)-- Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton, today announced that it will acquire O’Shaughnessy Asset Management, LLC (“OSAM”), a leading quantitative asset management firm. Through this acquisition, Franklin Templeton adds to its offerings in the high growth separately managed account (SMA) industry, where it is already one of the largest providers with $130 billion in SMA assets under management as of August 31, 2021. OSAM’s capabilities, both as a factor-based investment manager and as a Custom Indexing solution via OSAM’s flagship Canvas® platform, will serve as an important expansion and enhancement of Franklin Templeton’s existing strengths in SMA and custom solutions capabilities. The Canvas platform launched in late 2019 and has seen strong growth since its inception, now representing $1.8 billion of OSAM’s total $6.4 billion in assets under management as of August 31, 2021.

“Technological advances are reshaping how financial solutions are delivered, and we continue to invest in innovative technology to enhance client outcomes and their experience,” said Jenny Johnson, President and CEO of Franklin Templeton. “Custom Indexing is aligned with our commitment to bringing sophisticated customization to a broader investment audience, and I’m excited to welcome the OSAM team to Franklin Templeton.”

The transaction will bring compelling benefits to the clients that both companies serve across multiple channels. Custom Indexing represents a significant area of growth in asset management today, and Canvas allows financial advisors to build and manage Custom Indexes in SMAs that are individually tailored to the client’s specific needs, preferences, and objectives. Advisors can create investment templates, access factor investing strategies, utilize passive strategies, and apply ESG investing and SRI screens to adhere specifically to the client’s personal beliefs. Canvas also provides the opportunity for advisors to efficiently plan, set tax budgets, identify realized and unrealized gains and losses, and systematically sell certain positions to create offsets. OSAM is also regarded as a pioneer in factor-based investing with a long history of delivering its investment strategies through SMA and mutual fund solutions.

“Custom Indexing represents the next progression of investing through Indexing, ETFs, and Direct Indexing,” said Patrick O’Shaughnessy, CFA, Chief Executive Officer of OSAM. “As part of Franklin Templeton, we’ll have the opportunity to accelerate client growth at Canvas and continue to add to existing OSAM offerings. We’re excited by the incredible potential this acquisition creates and look forward to getting started.”

Through this transaction, OSAM’s more than 40 team members are expected to join Franklin Templeton along with all of the necessary intellectual property, investment management processes, and principal business assets necessary to evolve and grow the business within the Franklin Templeton Product Solutions group.

“We firmly believe winning solutions will need to combine a quantitative skillset, active investment management expertise, and a great digital user experience,” said Roger Paradiso, Head of Franklin Templeton Product Solutions. “This partnership will further enhance Franklin Templeton’s ability to deliver compelling individualized SMA solutions to clients, advisors and firms while continuously innovating to advance and shape the managed accounts industry.”

The transaction is subject to customary closing conditions and expected to close in the fourth quarter of calendar year 2021.

About Franklin Templeton

Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 165 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the Company brings extensive capabilities in equity, fixed income, multi-asset solutions and alternatives. With offices in more than 30 countries and approximately 1,300 investment professionals, the California-based company has over 70 years of investment experience and over $1.5 trillion in assets under management as of August 31, 2021. For more information, please visit franklinresources.com.

About OSAM

O’Shaughnessy Asset Management (OSAM) is a quantitative asset management firm based in Stamford, CT. The firm delivers a broad range of equity portfolios to institutional investors, individual investors, and high-net-worth clients of financial advisors. OSAM also serves as the investment advisor for a U.S. mutual fund and as a sub advisor to a family of mutual funds in Canada. The firm’s team has managed client assets since 1996. For more information, please go to www.osam.com.

Forward-Looking Statements

Statements in this press release that are not historical facts are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. When used in this press release, words or phrases generally written in the future tense and/or preceded by words such as “will,” “may,” “could,” “expect,” “believe,” “anticipate,” “intend,” “plan,” “seek,” “estimate,” “preliminary” or other similar words are forward-looking statements.

Various forward-looking statements in this press release relate to the acquisition by Franklin Resources, Inc. (“Franklin”) of O’Shaughnessy Asset Management, LLC, including regarding expected scale opportunities, growth, client benefits, key assumptions, timing of closing of the transaction, revenue realization and financial benefits or returns.

Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors, some of which are listed below, that could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements.

For a detailed discussion of other risk factors, including important factors that may affect Franklin’s business future operating results please refer to the risks, uncertainties and factors described in Franklin’s recent filings with the U.S. Securities and Exchange Commission (“SEC”), including, without limitation, Franklin’s most recent Annual Report on Form 10-K and subsequent periodic and current reports.

Any forward-looking statement made in this press release speaks only as of the date on which it is made. Factors or events that could cause actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Franklin undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

CFA^® and Chartered Financial Analyst^® are registered trademarks of CFA Institute.

Copyright © 2021. Franklin Templeton. All rights reserved.

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Franklin Resources, Inc.

Investor Relations: Selene Oh, (650) 312-4091, selene.oh@franklintempelton.com

Corporate Communications:

Lisa Gallegos, (650) 312-3395, lisa.gallegos@franklintempleton.com

Matt Walsh, (650) 312-2245, matthew.walsh@franklintempleton.com

franklinresources.com

O’Shaughnessy Asset Management

Corporate Communications:

Jonathan Mairs, (917) 517-7097, jmairs@igbir.com

Source: Franklin Resources, Inc.

FAQ

What is Franklin Templeton's acquisition of O’Shaughnessy Asset Management?

Franklin Templeton is acquiring O’Shaughnessy Asset Management to enhance its capabilities in separately managed accounts and custom indexing.

When is the acquisition of OSAM expected to close?

The acquisition is expected to close in the fourth quarter of 2021, subject to customary closing conditions.

How will the acquisition impact Franklin Templeton's SMA offerings?

The acquisition will expand Franklin Templeton's SMA offerings by integrating OSAM's innovative Canvas® platform and factor-based investment strategies.

What is the total AUM of OSAM and its significance?

OSAM has a total AUM of $6.4 billion, which will enhance Franklin Templeton's existing SMA assets and capabilities.