Franklin Templeton expects Asian assets to touch $50b in 5 years

SINGAPORE: US fund manager Franklin Templeton expects its Asian assets to grow by over 60% to $50 billion in five years, driven by fast-paced growth in South Korea, Taiwan and India, a senior executive said on Wednesday. Mark Browning, managing director of Franklin Templeton’s Asian business, said Asian retail and institutional investors are increasingly investing in stocks and bonds outside their home markets.

Franklin Templeton — a unit of Franklin Resources, the largest publicly traded US asset manager — has total assets of $600 billion, of which Asia currently accounts for about 5%, Mr Browning said. However, Asia’s portion is expected to rise as the firm expands its global footprint, said Mr Browning, who is based in Singapore.

“The growth in assets here always surprises us to the upside,” mr Browning said. “The reason for that has been the growing appetite among both institutions and public for investing internationally.”

He said Franklin Templeton’s Asian assets have grown about 30% since on October 1 to $31 billion, almost hitting the firm’s full-year target in the first eight months of its financial year.

“For this financial year we actually hit our target for 2007, which was a substantial increase over 2006,” he said.

The firm is currently managing about $14 billion in assets in Taiwan, $6 billion in India, $6 billion in South Korea, over $2 billion in Hong Kong, $1.2 billion in Singapore and $3 billion in Australia. It has also set up a joint venture in mainland China — Franklin Templeton Sealand Fund Management.

Emerging market guru Mark Mobius also manages Templeton Emerging Markets, part of Franklin Templeton, from Singapore.

The firm’s major competitors in

Asia include the fund management arm of Dutch financial services group ING Groep, US money manager

Blackrock, Switzerland’s UBS and Britain’s Schroders.

Mr Browning said the firm may also start a domestic asset management business in Australia, where currently it only sells funds that invest overseas.

“At some time over the next 12 to 18 months we will be making a decision on how we are growing in Australia and whether we need to build a domestic asset management presence,” he said.

He said the global boom in commodities has been a big plus for the Australian equities and real estate markets.

But he said that with retirement funds of around $900 billion in Australia institutional and retail investors will increasingly have to look at investment opportunities abroad.

Mr Browning said the firm is also considering whether it should enter the Malaysian asset management market.

He said Malaysia’s profile has risen among international investors because of its steps to liberalise currency trading