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Franklin Closes Athena Capital Buyout With AUM Worth $6B

Zacks Equity Research

Recently, Franklin Resources’ BEN wholly-owned subsidiary — Fiduciary Trust Company International — a global wealth manager completed the acquisition of Lincoln, MA-based Athena Capital Advisors, LLC. The terms of the deal, inked this January, remain undisclosed.

The acquisition’s completion will fortify its wealth-management business through diversification of the company’s investment solutions, in order to cater the rising demands of high-net-worth and ultra-high-net-worth clients.

Athena Capital is a privately-owned registered investment adviser, with around $6 billion in assets under management (AUM). It serves both tax-exempt institutions and taxable families with wealth management and investment counsel services, along with wealth planning, impact investing, and investment administration and reporting services. Notably, Fiduciary Trust Company International now would cater around $25 billion in AUM.

"Lisette and her team have been pioneers in the fields of impact investing and quantitative investment management, and the due diligence, investment research, and manager selection methodologies they have developed in these areas will strengthen the advisory services we provide across our organization," said John M. Dowd, chief executive officer of Fiduciary Trust Company International. "The combination of our firms will enhance the experience we can deliver to high-net-worth and ultra-high-net-worth clients across the country," noted Dowd.

Conclusion

Franklin’s inorganic growth activities reflect capital strength and efforts to enhance its performance. Increasing outflows in asset management business due to investors moving toward lower fee passively managed funds has forced asset managers to explore acquisition opportunities with wealth advisers as attractive targets. Remarkably, steady fees and growing demand for advice has made these firms attractive buyouts. Additionally, Franklin will likely benefit from an improving domestic economy.

Nonetheless, its performance and profitability might be hampered due to volatile markets and unfavorable global economic conditions on the emergence of coronavirus as a global pandemic .

Over the last six months, shares of Franklin have lost around 10.3%, as against the industry’s growth of 2.9%. The stock currently carries a Zacks Rank #3 (Hold).



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