Dubai: Franklin Templeton has its eyes set on retail clients in the region.
Gulf News had an exclusive interaction with Jennifer Johnson, president and chief operating officer at Franklin Templeton, and she was joined by Sandeep Singh, senior director and regional head, Central Eastern Europe, Middle East and Africa (CEEMEA), and Dhiraj Rai, sales director.
The asset manager, which had $717.1 billion (Dh2.6 trillion) of assets globally in 2018, has a sizeable business in the Gulf of which Dubai is the headquarters with 70 per cent of it coming from institutions and the remaining from retail.
But the firm is focusing on clients, who had been waiting on the sidelines, ready to be tapped.
“A lot of partners focused on high-end customer base. The foreign and local banks are moving downwards. Banks are also realising that we can’t just target the top 5-10 per cent of the segment and we move down and cover a wider audience. That could also be an opportunity for players like us,” Sandeep Singh told Gulf News.
Banks are also realising they can’t just target the top 5-10 per cent and need to cover a wider audience. That could also be an opportunity for players like us.
Banks like HSBC, Standard Chartered and other private banks have been tapping into the under-serviced middle segment in addition to the ultra and high net-worth individuals as the lower end of the market is huge. The higher-end market is often considered lucrative, with higher margins.
And the business has been strong so far in the year for Franklin Templeton regionally boosted by retail. When asked if geo-politics had impacted flows from clients. Singh said: “From a business perspective, it has been a very good year for us in the Middle East especially on the retail side. I don’t think geo-politics has impacted our flows. We had a very good year,”
Giving more details on the type of growth, Dhiraj Rai said: “on the long only side, we have seen good inflows in global macro and global fixed income strategies. Given the population here, India strategy has been in favour, US funds have done very well, last and not the least would be technology funds.”
The positive momentum has continued in the new year starting October, he added.
Outlook
Looking ahead, Franklin Templeton expects global clients to look at income based products, private credit, and other alternative assets.
“The yields are higher in private credit. People are not going to allocate their money to fixed rate strategy in a rising rate environment. The income based multi asset strategy could be an area of growth which would be in need in developed markets for ageing population,” Johnson said.
Regionally another big opportunity for the asset manager would be Saudi Arabia. “Saudi and Kuwait markets are currently tied. Whenever these market open up, we would be very excited about it. We put trust on the sweet spot because we expect a lot of inflows to come in,” Rai said. Industry experts expect a gush of liquidity to flow in the regional equities and bonds after the Tadawul index finds its place in the emerging market index next year and sovereign debt gets added to the JP Morgan bond index from January.
