On Wednesday, Franklin Resources announced its acquisition of Putnam Investments, a Boston-based financial services firm. The deal, which is expected to close in the second half of 2021, will expand Franklin Templeton's business in alternatives and retirement plans. Franklin Templeton will acquire Putnam Investments from Great-West Lifeco for up to nearly $1.3 billion, while PanAgora will remain with Great-West.
Franklin CEO Jenny Johnson said the deal was a way to build out the firm's pension and insurance assets while securing a new investment for the future. The acquisition of Putnam Investments will bring in more than $80 billion in assets under management, adding to Franklin Templeton's already substantial $1.5 trillion in assets under management.
The acquisition is part of Franklin Templeton's recent acquisition spree, as the California-based asset manager seeks to expand its investment offerings. The company has made several other acquisitions in recent years, including Legg Mason in 2020 and Benefit Street Partners in 2019.
The acquisition of Putnam Investments will also expand Franklin Templeton's reach in the retirement plan market, as Putnam Investments is a leader in the defined contribution space. This move comes as more Americans are relying on retirement plans to fund their golden years, making it a lucrative area for asset managers.
It is unclear what the new corporate parent will mean for Putnam Investments' extensive Boston operations. However, Franklin Templeton has stated that it plans to maintain the Putnam Investments brand and its existing leadership team.
The acquisition of Putnam Investments will also bring in a substantial investment from Great-West Lifeco, which will receive $1.15 billion in cash and a 3.9% stake in Franklin Templeton. Great-West Lifeco will also retain ownership of PanAgora Asset Management, its quantitative investment subsidiary.
In addition to the acquisition of Putnam Investments, Franklin Templeton also announced a $500 million investment from Great-West Lifeco, which will be used to fund future acquisitions and bolster the company's balance sheet.
Overall, the acquisition of Putnam Investments is a significant move for Franklin Templeton, as it seeks to expand its business in key areas such as alternatives and retirement plans. The deal is expected to close in the second half of 2021, pending regulatory approval.
Ticker: BEN, GWO
