Scots fund house seals blockbuster takeover
EDINBURGH Partners is being bought by US giant Franklin Templeton Investments in a deal believed to value the Scottish fund management house at more than £100 million.
A deal at this price appears to put a valuation of tens of millions of pounds on Edinburgh Partners co-founder Sandy Nairn’s stake of more than 40 per cent.
High-profile financier Sir Angus Grossart’s Noble Grossart merchant bank has a near-20 per cent stake in Edinburgh Partners. Sir Angus has been chairman of Edinburgh Partners since 2006.
In total, including Mr Nairn, more than 20 people in Edinburgh Partners’ management team have a 75 per cent stake in the business so it appears a significant number of executives in this group have holdings valued at millions of pounds in the deal.
Edinburgh Partners, which employs about 60 people, has funds under management of around £7.5 billion.
It made £13.97m of operating profits and £15.98m of pre-tax profits in the year to February 28, 2017 – accounts filed with Companies House in September show – figures that imply a sale price significantly north of £100m.
The terms of the deal were not disclosed when it was announced yesterday by Franklin Resources, which operates as Franklin Templeton Investments.
Mr Nairn, who set up Edinburgh Partners in 2003 after stepping down as chief investment officer of Scottish Widows Investment Partnership, will become chairman of Templeton Global Equity Group and remain chief executive of Edinburgh Partners.
He will report to Stephen Dover, Franklin Templeton’s head of equities. Mr Nairn will continue to be based in Edinburgh.
Mr Nairn, who graduated from the University of Strathclyde in 1982 and was part of the Templeton Global Equity Group between 1990 and 2000, said he was “very excited” to be returning to the company.
Jenny Johnson, president and chief operating officer of Franklin Resources, said: “We’re pleased to announce the acquisition of Edinburgh Partners, an established global value investment manager, and to welcome back Sandy Nairn to our organisation.”
Ms Johnson added: “He brings a tremendous amount of leadership experience and expertise in managing global and international equities, an area that continues to be of strong interest to our clients around the world.
“This is the latest example of the firm continuing to make strategic investments in relatively small, yet highly experienced asset management teams that complement Franklin Templeton’s global offerings.”
She noted Mr Nairn had “worked alongside the late legendary global investor, Sir John Templeton, and was employed by Franklin Templeton for more than a decade”.
Mr Nairn said: “I am very excited to be coming back to Templeton, the company that gave me my great appreciation for global investing. My team and I are deeply familiar with the history and strong reputation of the broader Franklin Templeton organisation, and we’re pleased to join such a well-regarded firm.”
The deal is expected to be completed in the first half of this year.
Edinburgh Partners’ pre-tax profits in the year to February 2017 were down from £17.39m in the prior 12 months, as revenue dipped from £34.41m to £28.44m on the back of a fall in funds under management.
At the time the accounts were filed, Mr Nairn highlighted a pick-up in investment performance and asset inflows and declared he was “pretty optimistic about where we are”.