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US fund giant eyes advice firms after taking Embark stake

US fund giant eyes advice firms after taking Embark stake

US fund giant Franklin Templeton has hinted at targeting acquisitions in the UK adviser market after announcing its "material stake" in platform provider Embark this morning.

Martyn Gilbey, the company’s UK head, said the market was historically divided between “manufacturers of funds” such as his company and “distributors of funds” such as platforms and advisers, but that the “boundaries” between the manufacturers and distributors were becoming blurred in the UK and globally. 

This was the reason for Franklin Templeton acquiring a stake in Embark, he said. It could also be behind the company's interest in advice firms.

Mr Gilbey said he could not comment on “projects or ideas we are working on”, but added that as the line blurred “wealth manager in the UK is an area that is interesting and attractive to us".

He added: "Some firms want to be just manufacturers of products, and others, such as us, want to diversify.” 

Several firms in the UK market, including Quilter and Standard Life Aberdeen, own the whole suite of platforms, advice firms and fund management businesses.

Mr Gilbey said the acquisition of the stake in Embark was “not about distribution per se, it is about providing us with a deeper insight into the opportunity set in our market. This particularly applies to the retirement income market.”

He declined to reveal the size of his firm's holding in the platform, but said Franklin Templeton was the second largest shareholder in Embark.

He also said the fund house had specified the cash it had put in had to be used to fund the acquisition of the Zurich adviser platform, which was announced last week.

Other shareholders in Embark include fund houses BlackRock and Legg Mason, platform technology provider FNZ, and the Merian Chrysalis investment trust.

Franklin Templeton chose not have a representative on the board of directors of Embark, however.

Franklin Templeton funds have long been available on the Embark platform and will continue to be so on the same terms as prior to it becoming a shareholder. 

Commenting on the investment Embark chairman David Etherington said: “That our business is able to broaden our institutional shareholder base and attract another world leading global investor such as Franklin Templeton is testament to the strength of Embark’s proposition and strategy.

"I am delighted to welcome Franklin Templeton as a new cornerstone investor into the group and would also like to thank all our existing shareholders for their support with the recent acquisitions of Zurich Wealth and Investments and ATS intermediary businesses.

"We have now very firmly established Embark as a significant player in the UK retirement and savings market.“

david.thorpe@ft.com

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