The parent company of Canada Life, Great-West Lifeco, has sold global investment firm Putnam Investments to Franklin Templeton for a potential value of $1.8bn ($1.45bn, €1.7bn).
Founded in 1937, Putnam Investments is a global money management firm with over 85 years of investment experience. At the end of January 2023, Putnam had over US$170bn in assets under management.
Putnam has offices in Boston, London, Munich, Singapore, Sydney and Tokyo.
The total potential transaction consideration and retained value is estimated to be $1.7bn-$1.8bn. Franklin Templeton will pay upfront consideration of $950m-$1bn, consisting of 33.33 million Franklin Templeton shares at closing and $100m in cash six months after closing, and up to $375m payable between 3 and 7 years tied to the growth of the partnership.
Lifeco will retain Boston-based firm PanAgora Asset Management, and realise the value of Putnam’s seed capital, which, together with closing adjustments, are estimated to be worth $375m-425m. Lifeco will also retain certain deferred tax assets related to Putnam.
As part of the deal, Lifeco and its parent company, Power Corporation of Canada, and Franklin Templeton have entered a strategic partnership to distribute Franklin Templeton products for the benefit of clients, distribution partners, and shareholders.
Lifeco will provide an initial long-term asset allocation amount of $25bn assets under management (AuM) to Franklin’s investment managers within 12 months of closing with the potential for that amount to increase over the next several years.
The transaction is expected to close in the fourth quarter of 2023, dependent on regulatory and other customary conditions. Lifeco has agreed to retain shares representing approximately 4.9% of outstanding Franklin Templeton stock for a minimum five-year period.
‘Compelling transaction’
Jenny Johnson, president and chief executive of Franklin Templeton “This is a compelling transaction for Franklin Templeton, and we are excited about the numerous opportunities that will be unlocked by this long-term strategic partnership with Power and Lifeco.
“Power and Lifeco are global leaders across financial services, particularly wealth, insurance, and retirement channels.
“With outstanding investment performance, Putnam will add complementary capabilities to our existing specialist investment managers to meet the varied needs of our clients and will increase Franklin Templeton’s defined contribution AuM. We are pleased to welcome Lifeco as a strategic investor, along with the impressive team at Putnam Investments.”
Paul Mahon, president and chief executive of Lifeco, added: “Franklin Templeton is a diversified global asset management firm, well-positioned to take Putnam’s strengths to the next level.
“As client needs for asset management continue to evolve, Franklin Templeton’s scale and breadth, together with Putnam’s complementary capabilities will drive positive outcomes for our companies, our clients, and our investors.”
“This transaction furthers Lifeco’s strategy of building and extending strategic partnerships with best-in-class asset managers to support our clients’ retirement, group benefits, and personal wealth management needs.”
