Franklin Resources Inc (Ben) Q2 2025 Early highlights: Navigating Market Challenges …

Q: Can you give instructions for the cost of the financial year in view of the latest market movements and the pressure on AUM? A: Matthew Nicholls, CFO and COO, explained that the effective fee zeal for the third quarter will probably remain around 38 basis points, which may be easy to rise in the fourth quarter. Compensation and services are expected to drop to around $ 810 million, with the performance fees of $ 50 million being accepted. The expenditure for IS & T is expected to be $ 155 million, with the occupancy costs remaining flat at around 70 million US dollars. The general and administrative expenses are similar to $ 185 million, as in the current quarter. For the entire year 2025, expenditure is expected to be roughly flat compared to 2024, with strategic investments in growth areas being financed elsewhere by cost savings.

Q: How high is the basic fee organic growth rate, including Western, and how does this affect the mixed fee? A: Jennifer Johnson, CEO, said that it was difficult to specify the exact organic growth process, without western debt streams, about $ 7.4 billion. The fixed income flows were positive at 2.9 billion US dollars, with Franklin achieving a fixed income of 5.4 billion US dollars in positive streams. The institutional pipeline is strong, especially with Franklin Festival. The effective fee for western assets lies in the high area of ​​15 basis. Despite the volatility, ex-western flows were roughly flat for April.

Q: How are the retail products developed in the middle of market volatility and how high are the growth offers for private market management fees? A: Jennifer Johnson found that Franklin Templeton has so far collected 10.4 billion US dollars in private markets and approached the lower end of its range of $ 13 billion to $ 20 billion. The Lexington's flagship secondary fund is expected to be completed later in 2025 or early 2026. The asset channel offers a significant opportunity, whereby the consultants want to increase the allocation to alternatives. The wide product functions and the distribution network of Franklin Templeton position them well to grasp this growth.

Q: Can you expand the fixed income strategies and present an update to the status of the Western asset management? A: Jennifer Johnson emphasized that the performance of Western Asset Management was strong despite the challenges, with drains of $ 10 billion in April, but gross turnover of $ 5 billion. They remain part of the institutional pipeline. Adam Spector, head of global distribution, added that munis, stable value, high yield and short-term products recorded strong currents. The insurance sector and the Clos were also successful areas.

Q: How does the international business of Franklin Templeton contribute to income and rivers and what initiatives are there to accelerate growth overseas? A: Adam Spector said that Franklin Templeton is positive in the gross sales in all regions and is available in over 30 countries. Regional trends include a focus on alternatives in Australia and income -oriented products in Asia. The company is well positioned with international and global stock products, which benefits from changes in the direction of non-dollar assets and valuables. The international business is making up for 470 billion US dollars with positive net flows in EMEA and America.

You can find the complete copy of the earnings call in the complete earnings call.

This article first appeared on Gurufocus.