Franklin Resources will acquire quantitative manager O'Shaughnessy Asset Management, adding to the firm's existing separately managed account business and customized solutions capabilities.
The deal is expected to close by the end of the year and financial terms are not being disclosed, said Matthew Walsh, a Franklin spokesman, in an email.
O'Shaughnessy Asset Management manages factor-based strategies and customized indexed separate accounts. The firm managed $6.4 billion as of Aug. 31 of which $1.8 billion was in customized indexing.
The firm's Canvas platform provides investors with customized indexing based on passive indexes and/or infused with factor-based strategies, Mr. Walsh said.
All 40 of O'Shaughnessy employees will join Franklin Templeton's product solutions business, reporting to Roger Paradiso, head of the business, but will remain in OSAM's Stamford, Conn. office, Mr. Walsh confirmed. The product solutions unit is part of Franklin's global advisory services division.
"As part of Franklin Templeton, we'll have the opportunity to accelerate client growth (on) Canvas to add to existing OSAM offerings. We're excited by the incredible potential this acquisition creates and look forward to getting started," said Patrick O'Shaughnessy, OSAM's CEO, in a Franklin news release.
Franklin's CEO is enthused about the new acquisition.
"Custom indexing is aligned with our commitment to bring sophisticated customization to a broader investment audience and I'm excited to welcome the OSAM team to Franklin Templeton," said Jennifer M. Johnson, Franklin's president and CEO, in the company's release.
Franklin managed a total of $1.57 trillion as of Aug. 31, of which $130 billion was separately managed accounts.