Franklin Templeton hit by record outflows amid SEC prove
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The news: Investment manager Franklin Resources, known as Franklin Templeton, posted record outflows of USD31 billion ($47 billion) for the quarter ending 30 September, primarily driven by USD37 billion in net outflows at its subsidiary, Western Asset Management, amid an SEC regulatory probe.
The numbers: The California-based fund manager, with USD1.7 trillion in assets under management, swung to a USD85 million net loss in the fourth quarter of fiscal 2024, the company said Monday.
The loss was largely driven by a USD389.2 million impairment charge tied to mutual fund contracts managed by Western Asset.
The context: The SEC investigation is in relation to trade allocations involving treasury derivatives, with Western’s co-CIO, Ken Leech, receiving a formal Wells Notice in August and taking a leave of absence.
The outflows were the worst in its history, according to The Financial Times.
Total investment management fees rose 8% year-over-year to USD1.77 billion. Excluding one-time costs, adjusted quarterly profit fell 3% to USD315.2 million.
The sources: Franklin Templeton release, The Financial Times
