Great-West Lifeco, the parent company of Canada Life, has sold global investment firm Putnam Investments to Franklin Templeton for a potential value of $1.8 billion.
The deal, which is expected to close in the fourth quarter of 2023, will see Franklin Templeton acquire Putnam’s $170 billion in assets under management. Putnam has offices in Boston, London, Munich, Singapore, Sydney, and Tokyo.
As part of the deal, Lifeco will retain Boston-based firm PanAgora Asset Management, and realize the value of Putnam’s seed capital, which, together with closing adjustments, are estimated to be worth $375 million to $425 million. Lifeco will also retain certain deferred tax assets related to Putnam.
As part of the deal, Lifeco and its parent company, Power Corporation of Canada, and Franklin Templeton have entered a strategic partnership to distribute Franklin Templeton products for the benefit of clients, distribution partners, and shareholders.
Lifeco will provide an initial long-term asset allocation amount of $25 billion assets under management (AuM) to Franklin’s investment managers within 12 months of closing, with the potential for that amount to increase over the next several years.
“This is a compelling transaction for Franklin Templeton, and we are excited about the numerous opportunities that will be unlocked by this long-term strategic partnership with Power and Lifeco,” said Jenny Johnson, president and chief executive of Franklin Templeton. “Power and Lifeco are global leaders across financial services, particularly wealth, insurance, and retirement channels. With outstanding investment performance, Putnam will add complementary capabilities to our existing specialist investment managers to meet the varied needs of our clients and will increase Franklin Templeton’s defined contribution AuM. We are pleased to welcome Lifeco as a strategic investor, along with the impressive team at Putnam Investments.”
Paul Mahon, president and chief executive of Lifeco, added: “Franklin Templeton is a diversified global asset management firm, well-positioned to take Putnam’s strengths to the next level. As client needs for asset management continue to evolve, Franklin Templeton’s scale and breadth, together with Putnam’s complementary capabilities, will drive positive outcomes for our companies, our clients, and our investors. This transaction furthers Lifeco’s strategy of building and extending strategic partnerships with best-in-class asset managers to support our clients’ retirement, group benefits, and personal wealth management needs.”
The transaction is subject to customary regulatory approvals and closing conditions.