Franklin Resources (BEN) 28 Jul 232023 Q3 Earnings call transcript

Welcome to the Franklin Resources Earnings Conference Call for the quarter ended June 30, 2023. Hello. My name is Joanna and I will be your call operator today.

As a reminder, this conference is being recorded. [Operator Instructions] I would now like to turn the conference over to your host, Selene Oh, Head of Investor Relations for Franklin Resources.

begin. may You

or are thank our and call joining today Litigation historical us Franklin of the Good Private the results. you Statements discuss Securities facts not are quarterly Reform Inc., future to other conference statements by number that important implied made to known Act could within Resources, meaning morning forward-looking results differ unknown and cause a XXXX. involve which These results for materially factors any from risks, forward-looking on regarding expressed of actual statements. forward-looking statements of this uncertainties such and

Risk These more and of sections most and detail uncertainties the the other recent in recent Franklin’s and XX-Q Form Franklin’s are the filings with described Commission, and filings. Factors other in Exchange Securities MD&A important risks, and XX-K factors in including

the to Chief to Now Executive turn Johnson, and Officer. I’d call our President over like Jenny

everyone, results you, third and Templeton’s Franklin thank Hello joining of to discuss for you XXXX. for Thank Selene. us the quarter fiscal today

Matt joined Global and of COO; Spector, As Adam usual, and CFO Head Nicholls, our our Distribution. I’m by

meets a Over geographies company offers firm of classes. results. of conditions long-term investment range and broad global the cycles. base We intentional of have we demands various managers resources believe across range and of diverse preserving our client specialist each of capabilities expertise of to strong and with market our investment economy of that benefit corporate the produces model combined our the investment the through and a Investment a clients a building vehicles past asset years in server diversified been broad

Indexes income adjusted of in in Financial rebalance markets the level at general by year. XXX Investment performance concentration half This quarter, long-term X%. in flows five net years. is remains improved extreme its calendar companies S&P than first most strong more in The stage XX and the positive. operating turned

their in concentration actively horizon. focus of also our opportunity index clients Client with outperform complex active in assist equity for while has this an managing them disciplined a A been navigating skilled long-term risk those the been to seeking a for we’ve and engaging hallmark portfolios, and always challenge environment. for but with to Templeton Franklin managers

preferences and public industry our that quarter. the positive there strategies. to and asset both saw evolve, market client a the and of options geographical demand multi-asset continue full is particular, in private to regions, As during interest managers which strategies strong range in both span We our flows have investment alternative in generated net for

in model flow geographies high we our strategy. SMAs addition, to experienced from regional improve channel, the and flows ETFs, network and and all strong In trends sales continue benefiting across

That’s Pacific flows. inflows Our reported EMEA of both and regions the Asia positive Asia Pacific. net second consecutive net for quarter long-term

in we priorities, strategic growth key would on always organic transactions our stated we’re markets. focused and interest accelerate diversify further that While distribution-led in previously have our business

quarter. With Power the partnership vision to Life Canada Code establishment Corporation more please more will long-term important of and we this sectors, to a of clients offering the with and of announce Great-West the choice

for our to representing opportunities looking both of of we within with we’re funded initial AUM managers Great-West will will will additional equity. XXXX, X.X% relationship, years. to long-term of Great-West, that and Franklin also compelling Great-West common equity which shares our expected next increase with subject firms partnering million shareholder approximately And XX the will the acquire realized of an is over amount Investments, $XXX several to be to closing asset a billion primarily in in a investment billion part months to $XXX are April As lock-up. forward as stock Putnam incremental time. the of over five-year actively a make Resources. This managed for issued specialist become that transaction to develop allocation Great-West from XX, XX of

assets in existing transaction management, insurance wealth these with of to grow in and further the key expands will and retirement, investment group The us the in companies serve further client segments. the of The focus relationship and agreement areas and each retirement also management. between our to important asset increase every better aligns clients enable the Franklin power insurance our Templeton and

benefit long-term Our investment complementary track classes strong expanded from asset and with clients records. key capabilities across will

billion. AUM contribution Specifically, the increase Putnam Templeton’s of Franklin $XXX acquisition will to defined almost

the first rate first rate approximately As the year quarter run adjusted to calendar conditions. adding in Putnam modestly of run of $XXX closing cost is on accretive a closing, million in customary to expected of XXXX to after track remains the EPS acquisition of reminder, acquisition adjusted end The be income energies. close the the subject fourth of operating year inclusive post-closing to by

to our for under trillion, Turning increased long-term market into positive we assets and with flows, first of million, reinvested management AUM now $XXX quarter, starting net to distributions. due inclusive to $X.XX specific numbers appreciation, flows the ending of shifted primarily and

the into assets Our record long-term strategies. net quarter, mix alternative a from flows continue net to inflows by in led of diversified benefit of $X billion

included Franklin alternative Benefit and in secondary Partners, in almost raising equity over the channel, under Street brand. Our Clarion of managers, Templeton total management Lexington five billion by net Partners, alternatives combined in a inflows. private one the largest Partners three generated wealth This billion

XX% assets alternative our our $XXX AUM contribute to and significantly billion or are results. of Today, total financial more

with another in of quarter, multi-asset In quarter strategies other activity the of terms net our areas flows positive of X.X billion. generated

team solutions strategies. gaining our institutions been across with of solutions investment success has array Our building large customized broad

billion $X $X.X mandate. institutional disclosed the Equity billion net outflows previously including to funding a this quarter, of improved

bond, into broad liquidity, flows income market by we and increasing experienced large-cap value, risk-off strategies of net for $X.X While into core enhanced with a we tip fixed international, markets, equities investment emerging interest having multi-sector, Fixed benefited we strategies. billion. and Client from with were uncertainty, philosophies. demand the continued all-cap environment, non-correlated impacted and core, income range saw inflows be Despite equity to outflows positive small-midcap strategies. continue active net net

sales prior regionally all flow compared resulted model strategy Our focused in geographies to across quarter. our trends and improving of the

long-term and $XX.X of the Pacific of $X regions From Asia billion, EMEA ETFs of earlier, vehicle As perspective, billion net net net billion, a quarter and AUM $X.X consecutive quarter-end. at generated totaled flows positive third mentioned representing approximately inflows the generated flows.

In quarter the and and managed client quarter, ended we Separately we also launched future generated and strong areas Two food ETFs health positive $XXX where see two thematic net Europe, AUM interest. billion both account the at in wellness. flows. expect to in

expand investment market our SMA to and the provide of new clients’ growth and to categories our products. across continue segments We breadth how choice in offerings access our expertise important they

solution a past direct continued AUM had indexing customization, and approximately September of XXXX, growth tailored doubled as its preferences, the has to on Franklin of we continues robust represents focused and to net long-term quarter, a the financial progression Canvas, the opportunity. Canvas launches million each have of believe announcement indexing $X.X inflows the quarter billion needs, and custom custom pipeline. client-specific tax-managed objectives. individually platform, custom including flagship SMAs advisors to allows is $XXX generated since significant net We quarter, that in This build strategies, important This Canvas of our to indexes ETFs fund. the launched manage are and and and overlay such next in and SMA indexing inflows trend since its key the in income platform acquisition.

performance, to pleased respectively. XX% which AUM periods now strong. of their in Turning XX-year to are XX% our XX% and composite investment respective XX% remains we X-X-X benchmarks say strategy and outperformed the

the This and XX% XX% XX% For X-year due investment in strengthened one the a which strategies. primarily mutual was improvement financials largest funds to from due income represents yield decline on prior XXX. S&P and and utilities peers which to underweight their fixed of periods generate certain overweight XX-year of income, XX% managed basis. performance, X-year and and X-year performance fund compared the equity technology higher AUM the outperform in our and was quarter X-X-X The for to

of AUM quarter our from was X.XX quarter trillion X.X% and the trillion. on XXth X.XX prior increased flat appreciation positive market by net the from to briefly Touching ending results, June Average flows. financial as AUM reflecting at prior

X% While our remains adjusted to increased billion. fee rate operating by revenue X.XX sector stable,

Adjusted $XXX.X quarter. XX.X% by X.X% prior in compared to XX.X% operating the the margin from operating Adjusted quarter. million was prior to income increased

cash to strong sheet of continue a maintain June balance total investments $X.X and billion with We XXXX. as XXth of

thank worked another of if them it I like we many through world. and unwavering and complicated success dedicated quarter would focus. have the wrap progress be to up, client not their contributions for their for markets employees our around our weren’t To possible would and for

questions. to turn your let’s Now, Operator?

go Instructions] Sachs. Thank ahead. question you. Goldman from at [Operator Alex Blostein comes Please First

trends the could Hi, with in Thanks the alternative the Maybe of good management morning. we asset space. start for you’re seeing question. some

on to color race more bit little highlighted and their the raised as a get could much we fund hoping find quarter was second Lexington I the in in First, capital deck continuing flagship how you here. in

large size So how you could do think ultimately be? the

And next the then in alts X to little expand else you private over pipeline into when is months bit months? generally, in the you what to XX broader expect come a that

publicly So, Lexington’s raised XX.X disclose so their on I far way fund. that think we billion to

that, X in billion And we in billion, the raised fact little is of a a what of we’re think quarter a was channel. X.X. dollars the I I the proud little about maybe incredibly over over it that think wealth

a XXX first of to million only financial team, training if that but think fund. retraining time the And how the to is I calls we’ve because requires channel sales time for raise in actually would it we be these fund, First alternatives own before that good advisors. it complicated expectation about of your wealth the talked pretty not raised was

of put train out train so well alts We’ve last built well, folks as our the own XX-person the sales And internal used financial to helping months, team. CASM XX specialist over we effort advisers. as our to lot a we’ve a

think rate to So I quite can possible great will that And And think happen. the that part was I billion. fund that, $XX it’s it. a of up

as to the far And XX months? the just hopper pipeline as there next over months out X Great. look in you of other the as then things

just still opportunity. space. great specifically in it’s credit, think so private a Well, all I mean we is

has Our going capital less when banks are been from that deploying view to M&A and lending. down even they’ve is down. slowed to it definitely is the by And fact slowed that

something article where they’re write talking will difference. was That a make up. M&A yesterday about pick Just an seeing

we the cover $XX having BSP both We’re billion; U.S. because Europe. and at thrilled

deals. to really expertise knowledge that, addition could work in out in where actually having is one situations important you the special things times of in But these the and that’s

able So that if it you that had being have can’t they internally. struggling is expertise BSP is underlying their restructure rates, and to really maybe important, cover an credit because of

been they’ve around underlying deals. workouts. They’re and issue And to global the very good since those to activity very they’re there again to biggest they’ve capital. more the we are some their but they’re there stresses, deploying, seen strong been seeing since see deals to the be So They able has continue -- think to deploy financial seeing you’re companies back handle they’re picks going up, able M&A -- seeing going as be where crisis. said best

real Clarion, then biggest with of probably price And estate is discovery. the the in case issue

think Clarion just I the everybody office. to office story. Unfortunately, XX% has Now knows about exposure

lower not and the the accept on prices I story big So just multifamily. space, a think with little around more important. them. But the frankly, is multifamily and only being industrial And on the buyers of get underbuilding been that, bit exposure also ask AI, which like but been willing a has data bid bigger been and sellers will about willing that’s things being for Their the to centers the pay. to has demand, focus issue

space. see the redemption just movement to as you’ll think that reminder, we They -- the their out, see move are estate So in real mostly you, institutional. on a just more I as that clients

And of sale. the do of want so to institutions they because kind requirement the any don’t have don’t kind redemptions fire

flexibility more -- like to than queues on think you something equates X%, which have redemption it I they Adam, any want if their so add looks there. And less to

in, a less an I but markets with is issue. see to think than markets, fundraising couple stronger Alex. traditional going public they’ve in things, denominator effect One, the been the we that I strong Sure. say of was

say So that good offering. really the the raise the we’re channel, we’re of the private Lexington our alternative firms would Wealth also it’s for markets. not feeling flagship about in all in I just

CP and opportunity the for products BDCs launching in funds there zone channel. are Reef We like going BSP, that an venture well, interval our in funds have Wealth Clarion

that. about good feeling So

add ability be Alcentra through the positive us positive then for launch the And product acquisition very think will in very to been a our having force has there, European as well. managed a distribution we Europe and

other point, And data then one Alex.

$X more. of excess expect in to has BSP dollars XX months, And powder, billion. dry over of terms In several next they raise the billion

Super Got helpful. it.

alts the the a market. like staying table, at mark-to-market a the negative follow-up, of been in a quick Just roll nuanced a other it the little positive for but AUM bit little old and when a look that question, second, dynamic it’s forward we And given a have surprised places. generally I’m in looks had the just on

is drove negative things? old is it the Or of mark-to-market something So bucket a idosyncratic lag? Thanks. in the that there

I think marks Lexington we negative and real in had and mineralizations BSP estate. positive the in in slightly

were So may I’m to not sure, Alex. have I’m what but not referring -- you it redemption. been sure

circle Okay. appreciate I probably it’s can back, it. estate. We real Thanks.

Thank you.

ahead. from Evercore. Please Next Glenn Schorr of go comes question

thanks Hey very much.

were all is Benefit interesting to in because in So I after old minds think the Lexington, wanted drill in world. our focused little Street further a Putnam

we growing Were more there? investing offering, sell like on can partnership I X-year stock. do expect importantly, on I’m then the and into the channel insurance with broad so they the And formed them. you, lockup lever the Which like $XX I that so with the that with retirement channels, curious billion strategies? actually distribution? like diversified the And what that you your you

It’s Adam here. Sure.

things. performance. couple Putnam, would of with one, we investment tremendous So say, I a get

X I had think they’re XX X for top the XX-year their the family in fund the to only firm period. like that the in

D.C. $X.X that like two areas few is performance and before. the that, they investment good have about a They quite things So gives go us leg other and did investment feeling value in of across that good Stable given into they’re we’re up. date the that assets bring not example third that, board. Ultrashort a where real a have capabilities a are Target we strong. where billion

will partner DCIO with. plan integrate been have strong really They And stronger there every our is client teams insurance and distribution and we in to so two very we each be in market. both those the that that

of in space. a way. have of the able DCIO all think together, the broad in much clients a them And We will effective teams range and be we more serve insurance two to

And looking -- date like it’s flows, think just target XX I X add at categories top to morning I I’m start funds. something the I just the slowing mean or

And We channel that, a target really we’re And the the so on really that Putnam expertise what will all with the that brings having good performing is date into excited. retirement selling think benefit products mentioned, to and platforms retirement that just having suite. in value target our stable then Adam to we great with. do as be a the two business date nice to add

of a get on as just what thing still have just by their that, market I’d over flows out And X% the of The outlined, month a and actually very the ago, based feel we’re slightly track only Glenn, make since got month point the X% acquisition acquisition acquisition is of planning we we we’ve is just the then Adam both add our now the around communicated investors strong at AUM on the financial as expect up in time place we performance perspective, strategic the been we to a transaction, perspective from announced Jenny been on and team the all it’s Adam stable. the that is and agreements announcement. key to the as process Putnam obviously the mentioned, with much as to

Alright. you Thank for that.

Please from go next Thank at you. question ahead. The Michael Morgan comes Cyprys Stanley.

Hey good morning. Thanks for taking question. the

rise deployment. investment Cash ask continues billion, $X.X cash to and balance wanted nearly Just $X capital billion. about The to here.

sounds to thinking work to you’re about some here buybacks putting debt little down, share limited Just of it a pay dilution. like curious offset bit from that how

so like look set to how just capital about opportunity thinking you you’re from work as that in curious M&A, it out So here. meaningful seems

Yes.

the is we you in hedging maintaining So on to Number will the a we much our might but are we’ve what on behind it the bit quarter two our that line I years. is we’ve we of our the communicated make going to dividend. up capital like date, trajectory think alluded many, sure in catch that communication very business. in grants shares look past. had remain as and repurchased We’ve opportunities it’s we’re that context front consistent growth management strategy that organic employee this to consistent Number little over one been that three, with many about. is the of Number with in

We obviously have We debt July. of down debt that we paid need to $XXX service. million in

had place, that paid announced, off. in As was and we that term we the loan that and

million by $XXX loan that, but with we’re by retaining amount a $X.X the saving liquidity We’re that term about exact larger doing same million replacing revolver. of

a million our Paid with revolving was which and the loan total. million $XXX single term in facility. $XXX taken we’ve it off $XXX million $XXX and loan, revolving facility million million credit credit $XXX one So X-year term replaced

and enhanced liquidity financial So and saved flexibility million that million our $X we’ve in by actually doing process. $X to the

on share opportunistic in repurchases M&A. then of And top that

has I share And space mentioned and we’re opportunistic several of space in the a alternative infrastructure how describe in we repurchase, to the very think as particular. fund acquisition. Putnam consequence would that the of I M&A terms Jenny around in asset way interested times, the decided the

those transaction up expect share that XX.X doing consequence when million else that issuing start after shares XXXX, in so the manner. occurs repurchase obviously, repurchasing being closing fiscal equal we date and of methodical a transaction. we’ve expect All in we shares certainly [Ph] closed We’re the to the date to pick

thanks. Great,

these AI, a days. a attention more AI generative lot Just quick broadly, follow-up getting more question,

And to a how what landscape? the about curious bit the impact revenue you’re or think potential on of benefit? maybe talk experimenting you you this expense extent Is an could So AI? a and What thinking that little this would do sort about how have competitive today? just could you’re from opportunity

Yes.

in years. benefits headquartered I Valley. being for one of think last We’ve probably been four the fortunately, work some I So in AI of actually doing Silicon that’s the mean,

built engine And If have we’re so heard around intelligence, doing use what management, automation. gold like business risk others for early AI doing tool all optimization you AI. systems, intelligent you probably warning things that’s on about our are

concept proof or of portfolio we a it’s have a we on of research So a sort going pilot -- assistant. like where our have

PM reports summarizing XX-Ks annual teams. our it’s for and So

One around own you a to to not things you’re have build training on of important sense that the world your the do your so data is most data.

AI working pilot conversational on a got we’re we’ve had generate to commentary. within help respond a things like going seconds. And desk to undergoing, We’ve draft XX that so on hoping to for fund

be it’s to the marketing Again, see generating all models training able material. to good

So and what’s the both model. language we’re and the best -- not Azure using because quite from for we’re Amazon us we’re sure

and I that benefit, So -- initially, like in then We’ve think us a we’ve the it efficiency of bit there. it product early tools. here. the more GO more you have benefit both portfolio message makes we quite got revenue-generating expense of it in is and we a research managers are things sort but be your it’s been And -- assistance got on going and because hope will go think efficient

you. Thank Great.

The next from comes question Please Thank you. Autonomous go Patrick Davitt ahead. at Research.

good Hi, morning everyone.

to path early if Thank change fiscal to you. there any quarter? the but And missed into as you have how think fourth about any for Sorry year? expectations expenses the thoughts this this, do enter XXXX is we on I your

you. Yes. Thank

year we then of essentially. will and in the what the what So terms quarter guide in through to guide the that is full expect fourth I’ll go lead

firstly, terms remain to EFR our in rate, XX points. we basis expect of So it around

called think around but basis it points the slightly points. than I in fourth basis might quarter, XX that’s it XX higher be

this fourth and terms benefits, is comp of all In again, quarter.

approximately in XXX, lead $XX the would similar consistent. and in as we’ve we to last modeling comp that performance to that very benefits. put million I fees, in $XXX assume For described us million at we past IS&T, would what described purposes, quarter

for expect XXs. we roughly of in same came we the mid- mid-XXXs, little than expect Last inclusive Occupancy T&E to quarter. be again. guided high of bit to continued in the high we that, to the the XXs. the in normalization We be a lower And G&A, in quarter,

to of just maybe to terms but certainly related of $X increased related performance I that, billion. last means for overall what end increased fundraising and on like management, time, increases high under what higher X.X due higher or that described It’s our similar to assets the over that, expenses, In than slightly fundraising better compensation to year, something the $X.XX very slightly billion. guide

again, expect fees, though market where of all the I XX% stays it’s as quarter. times -- this the on think -- margin, terms about to But guiding year, difficult stable area in then all equal, in obviously revenue, the margin we’re that mean and several that’s the to but on you’ve today, that asked be guide assuming margin and remaining it we is else past those because described. in I it’s the essentially I assuming performance that’s operating is in excluding means the our that next

And you. thoughts it any Thank early? on Or next still is year? too

I’d or It’s the -- we’re acquisition. it’s implementing The of thing question process interesting early. an obviously, Putnam say be going the to too integrating only because in

this think into announcement we we’ve integration two and that familiar the as I further get say think work dug and now, quite work things. we execution by with I can as we’re into post

helped perhaps has the you potential what think the going because XXXX out Putnam that expense a That’s efficiency M&A, can and in our benefits the areas continue as be efficient found as expense we re-examine on can terms on do of of acquisitions. more that I can I Putnam transactions meaningful derivative a the of Templeton outperform do see what in expect we within you the highlighted potentially into acquisition. of result things of us growth we’ve discipline other what to as and consequence more better. find and our side think communicated with us and that, expense how of that continued Franklin we we’ve in better One, be we sort acquisition and areas. focus we And can past of from of But how from will transaction. XXXX one we in will discipline the always We’ve integrate the re-examine get you’ll to -- be chosen it we the second things the us of that pursue drives

And amount catch-up in expenses? then exact Could the how placement you offsetting fees? you. of Thank housekeeping. quick give And was one the much us fee

look Patrick, this Yes, income for an the that that I quarter is X. at would way, essentially operating

So same in other words, catch-up practically the expense. revenue is the the associated the as with

slightly fact, the something have $X been In like expenses like or might that. higher million

income First neutral. then... And of all, operating

number management can In kind we of fees. so get to of the run rate

that. million, something $XX to mid-XXs. like In the low

Got it. a lot. Thanks

next you. Thank comes question Craig go Please Siegenthaler BofA. The ahead. from from

Good Thanks. morning.

to On company. a I could cutting know the of going after lot XX out of from $XX want cuts in the But I it’s transaction, back bring you’re closing. cost some the of Putnam happen to because costs to come billion months flows of what

$XXX think million. I

So outflows some on $XXX billion for potential the maybe I’ll provide base. perspective on merger-related AUM dis-synergies or Putnam’s

Yes.

transaction the that So is inclusive attrition announced company. we gave modest some of across as million we guide the that XXX the

that. got And so we’ve that’s how

have than and transaction. I reductions transaction operating frankly, other board, think the as potential and above well be this, and investment the given the get offset at Adam don’t in expected, had the we, of is modest beginning, expense attrition think therefore, history, which we again, for the in modest potential more retention any we The course, asset attrition expect dig strategies we’re by this would focused across operating that but this growth. -- as sales transaction we a relatively what that on that complementary extremely overlap from income we we want outlined to

potential again, firm we stay higher and be think than XXX, So the very on to there’s that. we

we’ve that portfolio of good management feel clients don’t positive. would very intend Craig, be of getting shift, the transactions I reactions we’re will post continuity which that make and and their the add -- that teams any investment is make teams transaction, is to other they stable, thing very given the number done they from

the is of never and the Thank I the XX% would acquisition. add across Adam. would But ever a I’d understate just integration that firm complexity just margin. implementation I also involving add. and also new XXX working you

should not first it all objective but that other that. see after get else over it’s time. opportunities from equal, that aggressive to our exceed a year, to So But beyond on able year, the and be remaining hugely business. is guide margin that remember first you We certainly to go

Thank SMA you, and on Adam. business. follow-up Matthew One the

great business It’s here. a got inflowing. You’ve

I think as Is and indexing. flagships it Is of then heavily the sales, that’s that SMA funds But highlighted flows I’m of direct you look when mix the driving and think also heavily does you one look are like And the channel? driving frankly, this what into Income across when what at are looks to it wirehouse? it -- other you business? what like? some RIA? curious the see

Sure.

at of the business I think forward. the at way that the look two about to think is look going one, the and legacy business, projection

wires. the business, the stronger the of firms portion assets ClearBridge, strongest to Legg of be Western that legacy with it the really at which at significant tended look and old was means Mason, we if a the and those So are in

our the SMA the you platform. fund it’s to look If the products at new adding really like business, income trajectory of

We’re RIAs on a it broker-dealers since and launching there. X recently number of already now

is. where momentum So of a lot that’s -- really the where

there The opportunity place seen I that And we’ve other year-over-year. our we say is AUM where we in place in that’s would where think our in XX% well. businesses I can as huge about munis, grow a a have in increase the really -- SMA

clients of choice. give strategy make we the sure our that is again, to So vehicles

out offer strategies, and be we’re of to both all format the we’d what fund that’s now. in right to So able an like key our for and them building SMA format,

you. Thank

you. Thank

from Next Brennan at UBS. ahead. comes Hawken question go Please

taking questions. Thanks my for Good morning.

up follow was -- sounds in to you’re wanted raising like. just So fees Lexington. the this Number there on still one, it catch-up

preliminary was close? this So a

about I being further little just though And seems And be be basis a coming the XX, at maybe be the there’ll because was running fees you more on fees quarter-over-quarter. and expected quarter. in close. to think math your contributed actual I there’ll Do a may be fees as the do comment formal quarter the you on this it expect flat about point catch-up the confused catch-up catch-up prior

that. wasn’t I about sure So quite

you If could clarify.

Yes. Thanks, Brennan.

So midpoint. number. That’s firstly, XX, but using the was just that not exact as said I I a

not on We’re say where couple fees just a going. guide to of going But our are catch-up things. I’ll

fund terms beginning, we’re this -- of rates. where I say at the couple in think fund to allowed raise, the around Jenny things mentioned So the a the of

Number means, closing we’re ahead we three, have of That filed may which billion the what right one, still next to Number in quarter. announced another at two, target. Number $XX.X fundraising, question, was was we’re answer we’re recently. now. your

don’t could but clear have effective think at in a our just be speak, quarter. I about this even positive without, I’ll that think form earlier. have know getting on impact exactly, of to because was closing question But Patrick this I likely rate. we We a it’s that is And fee so that some

points. think our quarter I fourth would expect around the even EFR the without catch-up it be basis we to XX in be

-- Correct? your that’s trying So se. to think we’re not the basis you reliant That’s were I fee question per our I XX get not think, is the at. points upon -- catch-up

yes, I that. appreciate yes. Yes,

to mechanics. those try want Just of to understand some

that laying So thanks out. for

fee, which and rate those funds. entire have the don’t catch-up the we this expenses the have we’re we And as have around course, but the a assets normalized do raising the is, raising X% that alternative when asset after we associated we -- have against we moment and do AUM, area. you higher one-off that a in after know, on fee closing then then expenses, obviously, we with time the of And have

our around and So EFR focus what I basis XX helps aspect points. fees would the That’s that on that long-term. remain of the helps us that that’s on

of sort This purposes. is Yes. it wanted I noise sure. to understand and just just for whatnot. modeling For

So for that. thank you

your in taxable flagged what led document. in benchmark. is I the versus that to, is which believe some guys there in investment comment improving was the performance lift income You referred performance strategies, to fixed

client or Western what and you’re any improving to the So confirm reversal. either not just dialogue on performance RFP impact Thank wanted this or from seeing you. and drove that whether activity

Yes.

sure And Western what to exactly, core, we’ve I and be core first might performance it’s thought seen positive performance feels So the X-year like trying turned quite, want I because improved net kind flows just the fund significantly point the there. this at Western. corner it will year-to-date. numbers is where be to at XX%. of the mutual improved one performance to at significantly not but macros, but address remember month the ETF quartile I’m on we in they’ve plus it other

the I Fund in Income think significant really how important swinging Franklin this. it’s be understand to can

mutual ETF So that’s fund the XX% number. of

in And such the were The is percentile. they at at average retail -- would category, there’s it XXth to is peer The X.XX% average that category peer retail an category multi-asset institutional institutional the The X.XX%. versus is the Income Fund in category. X.XX% be you channel Fund an in the yield X.XX%. for no There in category Morningstar. to if about compare income Franklin versus Income yield

$X.X the I that because there there just Income years if So that in be they important fact strategy net top Morningstar, it to in in relevant the up up. Unfortunately, is category. the that that proves XX% feel a swing it’s just XX-plus had space. are significant, started flows were we’ve the the my that when ago and in quartile, peers income so Franklin as income an understand, despite flows today would grandfather And no billion true isn’t as its it’s to like would us category at

we a really up late-stage pipeline, might significant you and build in. that, rate conversion to are your institutions what for I the quickly question to is because about one we Are cycle we to And that that And happen about seeing to a what if waiting not in not more have pipeline of really was is we’re but interest think the to expect as to opportunities and just because seeing such. number What but sales inflation. would RFPs going believe funded. add we’re settle is one a hike, as will

building those stage up do So is in late-stage opportunities. of see final a that contracting little a last deployment bulge a and bit but slower, we of

very it. Got Thanks much.

Thank you.

Worthington Next question Ken JPMorgan. comes go Please ahead. from from

product existing your Solutions already what To your extent a alternative And Hi, public alternative Solutions as AUM? to the integrated extent capabilities flows, Franklin with ecosystem? capabilities are the Solutions to in you improvements good contributor. products commenting morning. When important multi-asset on market growing what within investment mentioned are

that, say that would depends I clients. the So on more

So few retail of for example, those and FDIS have in channel those in far portfolios has won portfolios. mandates very alternatives the so in model included model

alternatives have combination hand, they’ve On of other the mandates insurance that also some won in there.

I group think the that think performs. question, that’s Solutions how -- that more FDIS, Franklin then Solutions, Investor is Group I on it depends more channel Templeton serving the

venture, only that as really well, to to few or for equity firms have I a traditional do private we’re I thing, is build that wants we’re alts what private source for build where can starting now that one a of mix add if real can think to we the debt, those other clients. only to estate, client solutions a Jenny, would that build is single The

one building thing retirement in figure alternatives been we some some And is go are to trying sleeves there. leases retirements to to who how models with actually, accounts bring in working also managed have and and interested out platforms and to

a that’s think opportunity. we So real

Okay.

isn’t these providing really a in So together single that It’s Solutions marketed capabilities from solution results really about just and combining combination. out? solutions the silos different

go have to No, is, a most portfolio use managers. OCIO that the -- multiple outside or real can the right do of I that because a their of I outcome our that even SIMs. so bring solution what it’s If somebody to multiple managers But might they team client. situation. include researches can right solution they they will so be. type our type be income they They -- of solutions ultimate depending wants client and model an LDI will in, No, on desired don’t it and

Got it. Thank you.

you. Thank

go ahead. comes Please question Jefferies. Fannon Dan Next from of

know Thanks, results. clarify the morning. I also I that that what guidance, you’ve above performance funds been affiliates fees, consistent to I or terms but been contributors. consistently And of in good the on that, you’ve the with were wanted hear and the

where other performance which some that December, as for even has and So potentially watermarks AUM? into performance about eligible maybe high think and about think about quarter, sit fourth we think where you crystallizations how sits should we

Yes.

fees Manager side. was by I the performance Investment alternative in even So our -- from a on few, on real there meaningful several investment Clarion last the has this we though portion our particular, side, specialist it of quarter, and been received the has managers, for mean, estate driven Specialist of it it been

And XX% where performance the hit. that clients five hit thresholds ago performance has invested by fees a of is X-year driven performance by multiyear been threshold years being

to in think next so this accuracy for form fees, but I at going quarter and any expect predict between XX because of guide the We continue into quarter. to guide it’s million hard million we $XX performance we $XX

calendar Specialist widespread on a to performance you But mentioned, As the is little guidance quarter, the when going then. more experience little sort fourth point. we our a which that quarter fiscal last Managers, calendar may these quarter, next of quarter, we and that’s get into across -- bit the provide the that first Investment more we’ll more bit

Okay. broader then, And That’s helpful. question Adam, a distribution. just on

about that all of this or are utilizing whether onboarding, of how AUM closing more some that hoping you where was it’s the in terms process? Specialist the several distribution in that you update are of I years, actually on Given point? much acquisitions last platform the fully and in acquisitions the is at of recent over of momentum think onto us of terms Managers And terms are the in to you the where centralized could

Sure.

was all all where servicing the distribution Franklin me starting go for globally, that legacy management point institutional the let and client team was raising think and Templeton. Wealth responsible I to was, central back which for

Legg their was management, more the in the the side a handled especially On Mason U.S. again, SIMs asset of institutional large portion it

coordinated say firm is is where centralized the a What at movement quicker more movement we’ve benefits are over smaller more like the of last towards Currie, significant. much would global seen that a two Martin years resources gradual a efforts. I

at distribution If you capability raising the well global has the is episodic It’s the end assets really spectrum other Western out at of distribution massively a where look that own. them. central more for of built their team

the been So of on benefits movement alternative in but where then it cooperate. on And the places size, more own. -- that are can but firms make find the introductions lot the depend also on general the does the to to side, alternative has able we’re salespeople their space close a the seeing to

affiliate terms there at put that still way around level to the Is of manager like numbers versus... is any held what in

really these did the it because shy team that culture what collaborative team together I to and it’s effort. just work from move is Yes. we’re teams towards where other trying can numbers that or away trying build tell it you what I where did a cooperation a to of we’re X and imply

Okay. Thank you.

Thank at go you. Bank. Bedell Brian The Please next question comes Deutsche from ahead.

Great. everyone. Thanks, morning good

Franklin Fund to want back X hop second. on Just the Income for

I from of, just performance. see that because in But still it the think agree moderate MorningStar? I and used that’s you’re Morningstar about that do -- of what recommending saying the allocation despite intermediaries But use the it. categorization mischaracterization with seen outflows Or you category. the I that terms sort fund Morningstar I improved and in of performance have do guess, them financial

why flows. there think is in in it’s billion about said I a I net flows, so it was Look that’s actually Well, net $X.X frustration.

of rates grew he interest because, income. equity for X, category was in anything because dividend yielding course, equity he XX% when couldn’t in you get During the look

then as earn able money to And been in you fixed you’ve income, shifted.

XX% XX%, they’re enough yes, I So just problem channel and big a it’s on personally that now is in no a peer they honestly, it’s to with so so Morningstar real Wealth discussion build group. competitors there’s can’t he’s the the the in at -- it,

to there. often the one point outperformance and we so institutional his And

screened I’m your there to sure some out. are it question, yes, gets situations And where answer so

they following of fund hold for income to tremendous loyalty. the used hand, to do. world has to it’s like as other and the for financial one the fee-based the the On buy team years, harder advisers challenges been has And and XX some went

a we why it hold get to do, it. platform, they in they because SMA and them sit quite there and SMA really that’s And through can platform They’ll retirement. pushed client on the an love it put they on

understand manage that swing clients yield, going get manage message it expect. how that it’s the team going which And we is important already to the But continue X-year try I for will what the because people much it; it’s out. he’s was XX%, category categories it the a our that came. to So that just it story is to think to

today’s concludes would Franklin’s Johnson, now Q&A like and This over for you. CEO session. hand to I Jenny final call President comments. the Thank back to

I quarter. everybody we and Well, today’s to again you participating their for want would Right. next employees in forward look and our dedication, to to for like thank thank I work again, just hard all to call. And speaking

you. So thank

This you. conference today’s concludes Thank call.

You may now disconnect.