Franklin Templeton values the French market
Launched over 20 years ago and with now 20 employees, Franklin Templeton Investments France has reached €5bn in assets under management, which are evenly split between retail and institutional clients.
“We have seen continued growth and we continue to focus on our two key messages: long term investments and diversification. We are not just a branch but a French domiciled company that will stay here for the long term,” Dominique De Préneuf, head of France at Franklin Templeton Investments, tells InvestmentEurope.
“The French market remains a very competitive and difficult one to enter due to its high costs. There is a colossal number of asset managers (634 at end 2014) and compared to other markets in Europe, French players’ expertise is incredible,” he says.
On the retail side, the FTI’s head of France stresses a “strong” demand for flexible funds. “Investors look for regular returns and low volatility. They would like to take part in the rise of equity markets but on the other hand, they have to limit downside,” he says.
“On the institutional segment, we provide investment solutions in asset classes such as convertible bonds and bank loans, as well as listed real estate and infrastructure, since we see some demand from French based institutional clients needing diversification,” De Préneuf adds.
Institutional investors in France are “clearly interested” in SRI products, ever more ahead of the Cop21 conference in Paris at the end of 2015 and since the country has become the first one to require a carbon reporting obligation from institutional investors.
“This is an area that we are currently looking at which will represent a major development for the firm,” De Préneuf points out.
Franklin Templeton Investments France has also improved its communication on social networks, investors looking for “a faster and more transparent information” according to De Préneuf.
Regarding market opportunities, he says European equities, US and emerging markets remain attractive.
“The quantitative easing policy drives a drop in financing costs and leads to a consolidation of banks’ balance sheets. There is a depreciation of the euro against the dollar which benefits exports. Oil prices are low.
“Greece remains a concern but we are also concerned about the willingness of France and Italy to implement reforms,” he explains.
Commenting on the opportunities in the US, De Préneuf declares a Fed rate hike is inevitable but its timing is more difficult to predict.
“A 3.5% GDP growth is expected for 2015 with inflation comprised between 1.5% and 1.8%. The labour market is currently performing well despite some distortion. We anticipate a rebound for Q2 2015 because Q1 has been impacted by the low oil prices,” he says.
On emerging markets, Franklin Templeton favours countries with strong growth, dynamic demographics, inflation drop as well as robust fundamentals.
“We see an abundance of worldwide liquidities there even though the EM are not really played by managers for the moment.
“EM countries have a more important amount of change reserves than most developed countries,” De Préneuf concludes.