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Franklin Resources, Inc., operating under the Franklin Templeton brand, is a global investment management organization. The company offers a diverse range of investment products and services, including sponsored funds, institutional and high-net-worth separate accounts, retail separately managed account programs, sub-advised products, and other investment vehicles . These products span various asset classes such as equity, fixed income, alternative, multi-asset, and cash management solutions . The company's revenues are primarily derived from investment management fees, which are based on a percentage of assets under management (AUM) .
- Investment Management Fees - Generates revenue through fees based on a percentage of assets under management, which are the largest contributor to the company's operating revenues .
- Sponsored Funds - Offers a variety of funds that are managed and marketed under the Franklin Templeton brand and other subsidiary names .
- Institutional and High-Net-Worth Separate Accounts - Provides tailored investment solutions for institutional clients and high-net-worth individuals .
- Retail Separately Managed Account Programs - Delivers personalized investment management services for retail investors .
- Sub-Advised Products - Supplies investment management services to products sponsored by other companies, which may be sold under those companies' brand names or on a co-branded basis .
- Sales and Distribution Fees - Earns revenue from fees associated with the distribution and sale of investment products .
- Shareholder Servicing Fees - Collects fees for providing services to shareholders of the investment products .
- Other Investment Vehicles - Includes various other investment solutions across different asset classes .
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With the ongoing investigations into Western Asset and the significant net outflows of $37 billion in the fourth quarter and $49 billion for the fiscal year , how does management plan to mitigate the impact on financial performance and regain client confidence in this segment?
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You have set a goal to fundraise at least $100 billion across private markets over the next five years ; given that you raised $14.8 billion in fiscal year 2024 , what specific strategies will you implement to achieve this ambitious target amidst market uncertainties in real estate and private credit?
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Considering your aim to scale ETF AUM by 3x and Canvas assets by 5x over the next five years , what are the key drivers you anticipate will contribute to this growth, and how will you differentiate your offerings in a highly competitive ETF market?
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With significant investments in AI, blockchain, and digital assets as strategic priorities , how are you balancing these investments with disciplined expense management, and how do you plan to generate tangible returns from these technologies?
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Despite improvements in mutual fund investment performance in the 1-, 3-, and 10-year periods , the company experienced long-term net outflows of $32.6 billion for the fiscal year ; what are the underlying factors contributing to these outflows, and what measures are you taking to reverse this trend and achieve sustainable organic growth?
Competitors mentioned in the company's latest 10K filing.
- Investment management companies: Compete with Franklin Resources in offering a wide range of financial and investment management services and products .
- Securities brokerage and investment banking firms: Compete with Franklin Resources in offering financial services and products .
- Insurance companies: Compete with Franklin Resources in offering financial services and products .
- Banks: Compete with Franklin Resources in offering financial services and products .
- Hedge fund firms: Compete with Franklin Resources in offering financial services and products .
- Other financial management institutions: Compete with Franklin Resources in offering financial services and products .
- Competing securities broker-dealers and banks: These entities distribute and sell their own proprietary funds and products, which could limit the distribution of Franklin Resources' products .
Recent developments and announcements about BEN.
Financial Reporting
Earnings Report
Franklin Resources, Inc. (NYSE: BEN) has announced its first quarter earnings results for the period ending December 31, 2024. The company reported a net income of $163.6 million, or $0.29 per diluted share, which is a significant improvement from the previous quarter's net loss of $84.7 million, or $0.19 per diluted share. However, this is a decrease compared to the net income of $251.3 million, or $0.50 per diluted share, for the same quarter in the previous year.
The operating income for the quarter was $219.0 million, compared to an operating loss of $150.7 million in the previous quarter and an operating income of $206.5 million in the prior year.
In terms of adjusted performance measures, the adjusted net income was $320.5 million, with an adjusted diluted earnings per share of $0.59, consistent with the previous quarter but slightly down from $328.5 million and $0.65, respectively, from the same quarter last year.
The company highlighted a 34% improvement in long-term inflows from the prior year quarter, generating positive net flows in equity, multi-asset, and alternatives, totaling $17 billion during the quarter. Despite long-term net outflows of $50 billion, excluding Western Asset Management, the company achieved long-term net inflows of $18 billion, positive across all asset classes.
Franklin Resources also reported a diversified institutional pipeline of won-but-unfunded mandates, which increased by $2.3 billion to $18.1 billion at the quarter's end. The company continues to see global client interest in a variety of investment options, including ETFs and its custom indexing platform, Canvas.
The company also launched its first evergreen secondaries private equity fund in January, achieving an initial fundraising cap of $900 million in assets under management.
Overall, Franklin Resources is focusing on strategic investments to serve clients better while managing expenses and enhancing shareholder value.