Franklin Templeton is entering into a definitive agreement to acquire Putnam Investments from Great-West Lifeco Inc. for about US$925 million.
As part of the agreement, Great-West will become a long-term strategic shareholder in Franklin Resources Inc. — Franklin Templeton’s parent company — with a 6.2 per cent stake. In addition, Great-West will will provide an initial long-term asset allocation of $25 billion to Franklin Templeton’s specialist investment managers within 12 months of closing, with that amount expected to increase over the next several years.
The strategic partnership aligns with Franklin Templeton’s focus to further grow insurance client assets, according to a press release, which noted it also significantly broadens the relationship between Franklin Templeton and the Power Group of Companies — Great-West’s parent company — in key areas of retirement, asset management and wealth management.
“With outstanding investment performance, Putnam will add complementary capabilities to our existing specialist investment managers to meet the varied needs of our clients and will increase Franklin Templeton’s defined contribution [assets under management],” said Jenny Johnson, president and chief executive officer of Franklin Templeton, in the release. “We are pleased to welcome Great-West as a strategic investor, along with the impressive team at Putnam.”
Robert Reynolds, president and CEO of Putnam, said the strong alignment between organizations is critical to the transaction. “We share a client-centric culture, a core belief in active management, a collaborative and research-based investment approach and a long-held commitment to fundamental investment principles. We look forward to joining Franklin Templeton in this next phase of our growth, as we come together to serve our clients, upholding our commitment to them and their needs.”