Franklin Templeton is 'buying Brazil,' local CEO says
While foreign investors, in general, have pushed local assets to the back burner, U.S.-based Franklin Templeton is buying Brazil, taking long-term risk and willing to participate in the consolidation the investment market is going through. According to Marcus Vinícius Gonçalves, the asset manager’s CEO in the country, Franklin Templeton seeks to "set up the business to take advantage of the flow where the market is expected to grow." The group has $1.5 trillion under management around the world, having grown through a series of acquisitions."Over time, Franklin Templeton shows it has a great acquisitive vein, has a strong earnings report, with $6 billion of cash liquidity, and always evaluates the opportunities and if it fits well here. The challenge is the size, it has to be something that makes a difference," he told Valor by videoconference. "The work to integrate a R$10 billion operation is the same as for a R$100 million operation. We have generally looked at things with a larger scale for a good utilization with the operation abroad."Asked if an eventual association with BB DTVM would make sense - as was considered in the industry about two years ago - Mr. Gonçalves says that the group always analyzes the opportunities that arise and BB DTVM is usually among the names consulted. "But acquisitions are not arising, there have been small operations, from $2 billion to $3 billion," he said. "Brazil is a strategic market; we repeatedly analyze it and are asked to do so. The country has its peculiarities, vicissitudes, but has scale and size, from the geographical point of view, and income. The company knows this and continues to monitor it."In markets like the United States and Asia, the group has been looking for wealth management deals with an innovation bias, and in Brazil it can evaluate something "with a technological footprint, not buying a traditional distributor," he said. "For example, a platform using artificial intelligence for recommendation [of investments], and that could partner with a distributor here," Mr. Gonçalves said.Founded in 1947, today’s Franklin Templeton is the result of 18 companies consolidated under the same umbrella. One of the most relevant purchases was that of Legg Mason, in early 2020, for $4.5 billion plus $2 billion in debt. The acquired group was already a combination of nine other asset management companies, including Western Asset, which has operations in Brazil, aggregating more than $800 billion...
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