Franklin Resources Inc. will purchase O’Shaughnessy Asset Management, making it the latest money manager to strike a deal for a customized index business.
With the acquisition, Franklin Templeton, as the asset manager is known, will add O’Shaughnessy’s $6.4 billion in assets under management to the approximately $1.5 trillion it already oversees, according to a statement Thursday from the San Mateo, California-based investment firm. The deal is expected to be completed by the end of this year. Terms weren’t disclosed.
In addition to factor-based investment strategies, Stamford, Connecticut-based O’Shaughnessy has a custom indexing business called Canvas, which started in 2019 and has amassed $1.8 billion in assets. The business of tailoring index strategies to suit a client’s needs is becoming increasingly popular, as it can provide tax advantages and address sustainability concerns.
That’s driving some of the largest money managers in the world to buy custom index firms. BlackRock Inc. purchased Aperio for $1 billion in a deal that closed in February. At the time the deal was announced, Aperio oversaw about $36 billion in assets. Morgan Stanley bought Eaton Vance for more than $7 billion, which included its custom portfolio business Parametric. In July, Vanguard Group announced the first acquisition in its history when it purchased Just Invest.
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