Franklin Templeton moots merging away UK Equity

Franklin Templeton Investments is considering merging away its Templeton UK Equity fund, following the acquisition of Rensburg Fund Management.

Jamie Hammond, the managing director, Europe, says Franklin Templeton will integrate funds “where it makes sense” and will “seriously” look at the Templeton UK Equity fund.

The fund has lost 23.8% over three years, compared to a sector average loss of 1.6% and a FTSE All Share Index gain of 2.2%.

Through the acquisition of Rensburg, Franklin Templeton hopes to strengthen its British offering, which has raised less money than other major American groups such as BlackRock and Fidelity.

Hammond says Franklin Templeton is best known for its global and specialist funds but has been striving to develop a range of core British equity products, an important asset class for British investors. Rensburg, he says, is a “strategic fit” and offers capabilities Franklin Templeton currently does not have. (article continues below)

Among advisers, Franklin Templeton’s perceived strengths are its product offerings within global bonds, emerging markets and American sectors. Its British and European offerings have proved less popular.

As a specialist British equity manager, Rensburg is expected to fill this gap. Its fund range comprises six distinct strategies covering various sectors, comprising the UK Equity Income, UK Blue Chip Growth, UK Midcap Growth, UK Select Growth, UK Smaller Companies and UK Managers’ focus funds.

“This is an exciting and important development, which underscores Franklin Templeton’s commitment to further enhancing its presence in the UK”

“I am confident that this new partnership will strengthen Franklin Templeton’s position in the UK market as we introduce Rensburg Fund Management’s products to our key partners and clients, such as large cross-border banks and institutions,” Hammond says.

“This is an exciting and important development, which underscores Franklin Templeton’s commitment to further enhancing its local presence in the UK.”

Through the acquisition, both groups are expected to growth their asset base and take advantages of sharing a common resource base. Rensburg currently employs 13 people in its Leeds office, six of whom work in portfolio management.

Alex Brotherston, the joint chief executive of Rensburg, says he intends to stay on and integrate Rensburg into the Franklin Templeton. “I will work closely with Jamie [Hammond] at Franklin Templeton to expand UK distribution,” Brotherston says.

Franklin Templeton declined to comment on market speculations revolving around the possible acquisition of Gartmore and their progress on filling the role of head of British distribution, which became vacant following Hammond’s promotion to managing director for Europe.