Franklin Templeton President and CEO Jenny Johnson speaks at the Delivering Alpha conference on September 28, 2023 in New York.
Adam Jeffery | CNBC
RIYADH — Franklin Templeton Chief Executive Officer Jenny Johnson made her first public comments since the company experienced its worst quarterly outflows in history and the U.S. Securities and Exchange Commission opened an investigation into suspicious trading. The company is focused on doing the right thing for its customers.
The California-based investment firm, which manages $1.7 trillion in international assets, has suffered huge losses since it announced in August that Ken Leech, co-heading investment officer of its largest unit, Western Asset Management, was taking a leave of absence. Financial hit.
Over the next month, the troubled subsidiary saw outflows of nearly $24 billion, taking its total outflows to $37 billion over the past three months, according to statistics. Report From the Financial Times.
Franklin Templeton’s fixed-income business has also endured years of underperformance, which many investors expect will continue as money flows into bonds and other fixed-income products, which account for about 30% of the company’s assets. will reverse.
Johnson told CNBC on Wednesday that Occidental Asset Management’s problems were devastating, but stressed that it was an isolated case and that supporting clients was Franklin Templeton’s top priority.
“We have an issue at West Air that has to do with individuals and some of the strategies, but there are certainly outflows within those strategies,” Johnson told CNBC’s Dan Murphy in Riyadh.
“I mean, the good news is — West has a ton of other strategies and has a ton of global customers, but the issues with those three strategies are definitely hurting us.”
When talking about the company’s efforts to restore investor confidence, the CEO emphasized that Franklin Templeton was cooperating with the government’s relevant investigations.
“Then the key thing is, what clients want to know is that their investment team is considering whether they are affected by this,” she said. “So we’re confident that they have the resources and that they will continue to manage, be supported and focus on what they do every day. So that’s an area of focus.”
“Westerns account for about 10 percent of our revenue,” Johnson added. “They have a myriad of different fixed-income strategies that go beyond what’s being discussed.”
As for what the latest developments mean for current investors, Johnson said, “Clients should be reassured that the strategies beyond that are very focused. In fact, even the current strategies, you know, the people who are being investigated are also Pay attention to this.
“West has had a long, long career as a manager through many different market cycles,” she said. “Like I said, they have global customers, very loyal global customers, so they will continue to focus on what they need to do every day.”
Johnson is confident in his ability to bring money back to the company. “We have a lot of different brands under the Franklin Templeton umbrella and outside of the West, and our other businesses are actually actively flowing,” she said.
“As a CEO, there are always going to be tough times and you have to focus on the long-term outlook and doing what’s right for your customers,” Johnson added. “My dad always said, do what’s right for your customers and the business. It will fall into place, so we are 100% focused on making sure we do the right thing for our customers.”
