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Deals & People May 3, 2023
Franklin Buys Managed Accounts Firm to Expand Adviser SMA Offerings
The investment manager’s purchase of volScout will add to its managed investment strategies for advisers working with institutional clients and high-net-worth investors.
Reported by Alex Ortolani
Investment manager Franklin Templeton, owned by Franklin Resources Inc., announced Tuesday the acquisition of a startup firm focused on providing personalized investment portfolio management.
Franklin Templeton’s purchase of volScout LLC, a startup that provides separately managed accounts and manages investor portfolios, will add to San Mateo, California-based Franklin Templeton’s managed option solutions on offer to advisers serving institutional clients as well as high-net-worth investors, according the announcement.
“SMAs are an important vehicle used by many advisers and clients, allowing for greater transparency, personalization and customization to specific client objectives,” Kristopher Smith, head of product solutions strategies and initiatives at Franklin Templeton, said in an emailed response. “In addition, with the ability to provide a tax management overlay, clients can garner additional benefit, especially during market volatility like we’ve recently experienced.”
SMAs have seen growth in recent years as advisers look to provide more personalized investment that allows for tax management, income production, state-specific needs and cash flow options. Assets in managed accounts grew 24% in 2021 to a high of $10.7 trillion, according to the latest data available from Cerulli Associates.
The founding partners of volScout, Brad Berggren, Jon Orseck and Roger Weber, will continue on after the acquisition, operating as the newly formed Franklin Managed Options Strategies LLC, or Franklin MOST, according to the announcement.
Product head Smith said the acquisition allows Franklin Templeton to expand and complement its suite of SMA options with call writing—a type of options trading—and hedged equity strategies that help advisers offer clients incremental returns while reducing downside volatility in their portfolios. The offering can be used in a separately managed account format or through other private fund structures, according to the announcement.
“We see this as a great extension of the solution set we’re able to bring to both institutions as well as advisers serving high-net-worth clientele,” Smith said.
Franklin Templeton currently has $110 billion in SMA assets under management, the firm noted.