Research · Sep 3, 2026
[BEN] Franklin Resources Thesis 2026: Private Markets Reach Quarter-Trillion as Active AUM Recovers
Franklin Resources, Inc. (Franklin Templeton) FY25 (Sep year-end) revenue $8.77B (+3%); op income $604M (+48% recovery from FY24 trough); NI $525M (+13%); EPS $0.91 (+7%). FCF $912M (+15%). AUM $1.61T at Q3. Investment Management — Public markets: >50% of mutual funds + ETFs + composites outperforming peers + benchmarks. Private markets: $270B alternative AUM with $95B in private credit (post-Apera acquisition). FY25 private markets fundraising $22.9B (FY26 target $25-$30B). Distribution: Retail SMAs AUM $165B (+21% CAGR since 2023); Canvas AUM tripled since 2023 (+82% CAGR); ETF AUM 75% CAGR since 2023 with 16 consecutive Q net inflows. Private Wealth Management: Fiduciary Trust International AUM $43B (goal to double by 2029). Digital Assets: $1.7B tokenized + digital AUM (+75% from beginning of 2025); tokenized money market fund with intraday yield feature. Q3 institutional pipeline record $24.4B unfunded mandates. Q3 long-term net outflows improved to $9.3B (vs $26.2B prior Q). Apera Asset Management majority acquired (European direct lending). Total debt $13.30B (+2%); dividend $684M (+4%, Dividend King); buyback $240M (-12%). FY26 framework (Year 1 of 5-Year Plan): target end FY26 at or below adjusted expenses vs 2025 with higher operating margin; private markets fundraising target $25-$30B; entering FY26 with $200M+ run-rate cost savings vs FY25; Q1 EFR ~37bp; comp + benefits ~$880M; IS&T ~$155M; occupancy ~$70M; G&A $190-$195M. Risks: market beta, Western Asset Management dynamics, active mgmt secular pressure, M&A integration (Putnam, Apera, Lexington), competitive landscape (BlackRock iShares, Vanguard, State Street, Fidelity, Schwab, Capital Group, Invesco, JPM AM), fee compression.