Greg Johnson predicts lots more M&A activity among mutual fund shops and other asset managers, at least among mid-size players.

Gregory E. Johnson  Franklin Templeton Investments Chairman of the Board, Chief Executive Officer

The Franklin Resources [profile] chairman and CEO shared his prognostications with Stephen Foley and Robin Wigglesworth of the Financial Times.

"In any business where margins are under presssure, there will be consolidation as a way of making efficiencies, and that is being accelerated," Johnson tells the FT. "Whether there were ETFs or not, it's a much more mature business these days."

"The bigger the firms, the harder it will be," Johnson adds. "I wouldn't envisage any of the top 10 players merging. But we will see activity in the middle of the market."

That "M&A in the middle" prediction for asset management was echoed by fundsters and other industry insiders who talked to MFWire this week in Orlando at the 2016 INSITE conference hosted by broker-dealer and RIA custodian Pershing. Conferees see big shops getting bigger, to gain more scale on things like distribution, even as smaller boutiques continue to pop up and make their own niches without worrying about scale. It's the firms in the middle, fundsters say, that increasingly face the pressure to scale up further or join forces.

Johnson's comments, the FT notes, come as Franklin "is on course to record its eighth straight quarter of net outflows." The company had $743 billion in AUM at the end of Q1 2016. 

Edited by: Neil Anderson, Managing Editor


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