American giant in Edinburgh Partners takeover

Scottish fund management house Edinburgh Partners is to be bought by American investment giant Franklin Templeton.

The exact terms of the transaction have not been disclosed but it is believed that the deal values the Scottish fund management house at more than £100 million, representing a valuation of tens of millions of pounds on co-founder Dr Sandy Nairn’s stake of more than 40 per cent.

Noble Grossart merchant bank, the firm belonging to financier and chairman of Edinburgh Partners since 2006, Sir Angus Grossart, has a near-20 per cent stake.

In total, including Dr Nairn, more than 20 people in Edinburgh Partners’ management team have a 75 per cent stake in the business meaning a significant number of executives have holdings valued at millions of pounds in the deal.

The transaction, which is subject to regulatory approvals but expected to be completed in the first half of 2018, will see Dr Nairn become chairman of Templeton Global Equity Group while remaining investment partner and CEO of Edinburgh Partners.

Dr Nairn, who established Edinburgh Partners in 2003 having previously been chief investment officer of Scottish Widows Investment Partnership and part of the Templeton Global Equity Group as executive vice president and the director of research, will now return to the firm where he will report to Stephen Dover, Franklin Templeton’s head of Equities.

Franklin Templeton, which is listed on the New York Stock Exchange under the ticker symbol BEN, in honour of Benjamin Franklin, for whom the company is named, is a pioneer in global investing, with a storied investment philosophy that dates back to the 1940s.

Its team of 39 investment professionals, based in offices around the world, manages $101 billion (£74.5 billion) in assets.

Jenny Johnson, president and chief operating officer of Franklin Templeton, said: “We’re pleased to announce the acquisition of Edinburgh Partners, an established global value investment manager, and to welcome back Dr. Sandy Nairn to our organisation.

“He brings a tremendous amount of leadership experience and expertise in managing global and international equities, an area that continues to be of strong interest to our clients around the world.

“This is the latest example of the firm continuing to make strategic investments in relatively small, yet highly experienced asset management teams that complement Franklin Templeton’s global offerings.”

Based in Edinburgh, with an office in London and two in the United States, Edinburgh Partners currently invests globally with an emphasis on absolute returns over a long-term time horizon.

Its team of 12 investment professionals have a combined average tenure of 22 years managing approximately US $10 billion (around £7.5 billion) as of December 31, 2017 in global and emerging markets equities.

Dr Nairn said: “I am very excited to be coming back to Templeton, the company that gave me my great appreciation for global investing. My team and I are deeply familiar with the history and strong reputation of the broader Franklin Templeton organisation, and we’re pleased to join such a well-regarded firm.

“I look forward to sharing my perspective and experience with the Franklin Templeton organisation. The access to Franklin Templeton’s extensive global resources will allow me to focus my time on investment management, as we continually seek to bolster our investment process and enhance our clients’ experience.”