Franklin Templeton and Nedcor Investment Bank Asset Management have agreed in principle to merge the...
Franklin Templeton and Nedcor Investment Bank Asset Management have agreed in principle to merge their South African investment business.
The proposed joint venture, which is likely to take the form of a new company, will manage the combined assets of the two companies and should provide a boost to Templeton's modest presence on the Continent.
The company has had an investment presence in South Africa since 1995, but an asset management arm only since 1998. Both NIB Asset Management and Templeton cover broadly the same market - selling unit trusts to institutional investors and private clients.
The primary driver behind the merger is therefore the opportunity for a fast increase in market share, rather than an attempt at quick diversification.
The agreement has yet to be authorised by the South African authorities, but if it gets the go-ahead, the process should start to happen by around October. An official announcement about the proposals and the strategic impact on the two companies will be made in August.
The move follows poor performance figures from Templeton's Emerging Markets funds. The annual TEMIT April figures showed a performance of 3.31% for the previous 12 months, well under the MSCI Emerging Markets Free Total Return Index of 25.7%.
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