Franklin Templeton is on the cusp of acquiring a “material stake” in platform group Embark as the fund group lines up disruptive fintech M&A opportunities.
The investment, subject to regulatory approval, will see the asset manager become one of the largest cornerstone investors in Embark and represents its first external investment into the UK’s “rapidly evolving retirement and wealth sector,” a press release said.
“The UK long-term savings market is undergoing significant disruption, driven by regulatory and demographic changes, technology innovation and market consolidation,” said Martyn Gilbey, UK country head of Franklin Templeton.
“As a result, the traditional barriers between manufacturing and distribution, and in particular the demarcation between pensions and wealth products are being eroded with significant opportunities for asset managers to participate and secure long-term value in new operating models.”
Franklin Templeton CEO eyeing disruptive tech
Incoming Franklin Templeton CEO Jennifer Johnson (pictured) has vowed to make investing in disruptive technology a top priority for the asset manager.
Speaking to the Financial Times, Johnson who replaced her brother, Gregory, as chief executive of the $693bn global asset manager this month, said she would take “full advantage” of being headquartered next to top fintech innovators in the heart of Silicon Valley.
The fund group has recently filed an application with the Securities and Exchange Commission to launch a blockchain fund.
Gilbey said Franklin Templeton’s investment in Embark aligns with this firm-wide initiative of exploring acquisition-related growth opportunities in the fintech space.
“Our efforts have been focused on opportunities with the potential to grow real scale, to diversify our business interests, and to offer the opportunity for innovation at both a consumer and distribution level,” said Gilbey. “We have worked with Embark for some time as a research house and know well their ability to innovate and deliver asset growth.”
List of Embark stakeholders grows
Franklin Templeton is the latest asset manager to eye up the UK retirement business.
Blackrock, Legg Mason and the Richard Buxton-backed Merian Chrysalis fund are among the firm’s existing institutional shareholders with the trio participating in Embark’s latest £40m funding round.
Fintech giant FNZ also owns shares in the business, acquiring a 9% stake back in January. FNZ is responsible for the tech behind the Embark platform and in 2017 helped it to launch a wrap platform for financial advisers.
Embark currently has £33bn in assets under administration for 300,000 clients.
