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First foray into pensions

Franklin Templeton takes stake in pensions group Embark

Investment management firm Franklin Templeton is expected to take a stake in pensions group Embark which recently acquired Alliance Trust Savings’ £6 billion adviser platform.

It will see Franklin Templeton become the Embark’s second-biggest investor and help support Embark’s acquisition strategy.

Franklin Templeton will join other big ticket investors BlackRock, FNZ, Legg Mason and the Merian Chrysalis fund on the share register at Embark which is in the process of buying Zurich Wealth and Investments.

California-based Franklin Templeton last year acquired Scottish fund boutique Edinburgh Partners for an undisclosed sum.

This latest deal is the first external investment Franklin Templeton has made into the UK’s retirement and wealth sector, and is part of its global strategy to take strategic stakes in companies that are disrupting traditional business models with technological innovation.

Embark group 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.

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

Earlier this year Edinburgh-based platform tech firm FNZ took a 9% stake in Embark.

Franklin Templeton UK country head Martyn Gilbey, said: “The UK long-term savings market is undergoing significant disruption, driven by regulatory and demographic changes, technology innovation and market consolidation. 

This deal is in line with our firm-wide objective of exploring acquisition-related growth opportunities in the fintech arena

– Martyn Gilbey, 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.

“This investment represents the first foray for Franklin Templeton’s UK business into the retirement and wealth space which is in line with our firm-wide objective of exploring acquisition-related growth opportunities in the fintech arena.

“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. We have worked with Embark for some time as a research house and know well their ability to innovate and deliver asset growth.”

Franklin Templeton will not hold a seat on Embark’s board following the deal.

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