History of Franklin Resources, Inc.
The company was founded in 1947 in New York by Rupert H. Johnson, Sr., who ran a successful retail brokerage firm from an office on Wall Street. He named the company for US founding father Benjamin Franklin because Franklin epitomised the ideas of frugality and prudence when it came to saving and investing. The company's first line of mutual funds, Franklin Custodian Funds, was a series of conservatively managed equity and bond funds designed to appeal to most investors.
After Rupert Sr. retired, his son, Charles B. Johnson (Charlie), took over as president and chief executive officer in 1957 at age 24. There were only a handful of employees at that time and the funds had total assets under management of US$2.5 million. Franklin was swimming against the tide because insurance companies dominated the middle class investing markets, but Charlie was convinced that he had a good story to tell.
By the early 1960s Charlie and his team's persistence was paying off and the company was growing albeit slowly. It was a struggle to keep up with the day-to-day demands of the business and Charlie continued to wear many hats—mutual fund manager, wholesaler, accountant. Rupert Johnson, Jr., Charlie's brother, joined the company in 1965 and also took on multiple roles. A decade of extreme bull and bear cycles, the 1960s was an exciting time to be in the industry.
Franklin went public in 1971, which gave Charlie and team the capital needed to grow the business and position it for the future. In 1973, the company acquired Winfield & Company, a San Mateo, California-based investment firm, and moved Franklin's offices from New York to California. The combined organisation had close to US$250 million in assets under management and approximately 60 employees. In 1979, Franklin Money Fund (not available to UK investors) began a growth surge that made it Franklin's first billion-dollar fund and launched the company's tremendous asset growth in the 1980s.
Starting in 1980, the company's total assets under management doubled (or nearly doubled) every year for the next six years. The company's stock began trading on the New York Stock Exchange in 1986 under the ticker symbol "BEN". In the same year, the company opened its first office outside North America in Taiwan. In 1988, Franklin acquired L.F. Rothschild Fund Management Company. Assets under management for Franklin grew from just over US$2 billion in 1982 to more than US$40 billion in 1989 (the crash of 1987 had little impact on Franklin's income and bond funds). Not one to rest on their laurels, management was concerned about Franklin's heavy emphasis on fixed income investments that had become the company's bread and butter.
Strategic acquisitions in the 1990s helped Franklin diversify its investment management capabilities beyond fixed income and also expand its global footprint throughout Europe and Asia. In 1992, after striking a deal with famed global investor Sir John Templeton for the acquisition of Templeton, Galbraith & Hansberger Ltd., Charlie was named Fund Leader of the Year for spearheading what was then the largest merger of an independent mutual fund company in history. Templeton gave the company a strong portfolio of international equity funds as well as the expertise of emerging markets guru Dr. Mark Mobius, who currently leads a team of emerging markets analysts and manages emerging markets portfolios. Dr. Mobius has spent more than 40 years working in emerging markets all over the world. Then in 1996, in an effort to broaden its line of domestic equity products, Franklin Templeton bought Heine Securities Corporation, investment adviser to Mutual Series Fund, Inc., from Wall Street icon Michael Price.
Several more key acquisitions solidified the company's position as a premier global investment management organisation: Bissett in 2000, Fiduciary Trust in 2001 and Darby in 2003. In 2005, Gregory E. Johnson (Greg), Charlie's son, became chief executive officer, assuming overall responsibility for leading Franklin Templeton Investments. Greg had grown up in the business and worked his way through the organisation beginning on the trading desk at age 24 in 1985. Charlie retained his role as chairman and continued to provide guidance to Greg and his leadership team.