Franklin Templeton Investments has formed FTI Institutional, a single global business development and marketing platform for the institutional investment businesses of Franklin Resources Inc., Templeton Worldwide Inc. and Fiduciary Trust Co. International.
All sales, client service, product management, marketing and support teams will be integrated under FTI Institutional. However, the investment operations of Franklin, Templeton and Fiduciary will remain separate.
William Y. Yun, who was president of Fiduciary before it was acquired last April by Franklin Resources Inc. San Mateo, Calif., will be president of FTI Institutional, which will have its headquarters in New York. In an interview, he said, "We took the best practices of each organization and integrated their strengths. Fiduciary had a very strong product management area and Franklin had a strong client service model, which we're using in the new operation."
The rest of FTII's top management comes from Fiduciary. Henry P. Johnson, who was executive vice president and director of business development at Fiduciary, will be executive vice president and head of the sales, client service, product management and marketing support efforts for the new entity.
David Smart, managing director-Europe and a senior member of Fiduciary's global fixed-income team, will be executive vice president of FTII, overseeing the sales, client services and marketing activities in Europe, Africa and the Middle East.
Thomas J. Duffy, head of Fiduciary's Asian operations based in Hong Kong, will be executive vice president of FTII and run its operations in Asia and Australia.
However, Mr. Yun pointed out that Reed Hutchens, head of client services for FTII, was senior vice president and director of client services at Templeton and Tracy Harrington, who will oversee marketing support services at FTII, was senior vice president of marketing support at Franklin Templeton.
"I think we've taken the best practices of all (three) organizations and combined them into FTI Institutional," said Mr. Yun. He is not concerned that other high-level executives from Franklin and Templeton who didn't get major roles within the new business platform will leave the firm.
Concept not new
Mr. Yun said while the original concept for the new entity emerged during planning sessions among managers of the three firms after the acquisition, the concept also was suggested in a report put out last June by BARRA Strategic Consulting Group and Merrill Lynch & Co. Inc., "Success in Investment Management: Building and Managing the Complete Firm."
"It talks about the multiple platform business model with multiple investment platforms but a common distribution, sales and client service operation" said Mr. Yun.
FTII, which now has $60 billion in assets under management, has a target growth rate of 15% a year. Mr. Yun said the firm expects much of its asset growth to come from Europe, Asia and Japan.
"The growth rates overseas are expected to be higher than in the U.S., which is a more mature market."
While FTII will offer investment strategies from each of the three firms, it also plans to develop strategies of its own. The first one is a blended core international product. Mr. Yun said the approach will use a combination of growth and value investments whose weights in the portfolio will vary depending on which style is most in favor at the moment.
Fiduciary, which before its acquisition by Franklin basically was an institutional firm using a growth management style with a large international operation, will be offering the most investment strategies - 14 - to the new entity. Templeton, which had a strong international presence with a value investment orientation, will provide seven investment strategies to FTII. Franklin, which is largely a retail-oriented firm that offered both growth and value, will provide five investment strategies to the new business platform.
Sept. 11 impetus
Planning the new entity helped Fiduciary recover from the body-blow it received as a tenant in the World Trade Center Sept. 11. The firm lost 83 employees in the disaster and recently moved into new offices at 600 Fifth Ave. in the Rockefeller Center complex in midtown Manhattan.
"What brought us together more was the events of 9/11," said Mr. Yun. "The help we got from Franklin was great." He added that "although it's not a desirable way to get to know one another, it (the disaster) helped us integrate the firms faster than we would have without 9/11."