Franklin Templeton is entering a strategic partnership with three major institutional infrastructure investment firms – Actis, Copenhagen Infrastructure Partners, and DigitalBridge – in a move to expand private wealth investors’ access to infrastructure opportunities.
The collaboration, announced Tuesday, reflects a growing trend among traditional asset managers to seek partnerships rather than acquisitions as they look to diversify into private markets.
The alliance will focus on providing US advisors and their clients with exposure to high-growth infrastructure sectors, including energy security, electrification, digitalization, data centers, and renewable energy.
According to Franklin Templeton, the partnership aims to deliver “institutional-quality” private infrastructure solutions, with an investment profile expected to offer stable, inflation-linked cash flows and resilience through economic cycles.
Jenny Johnson, president and chief executive of Franklin Templeton, said the partnership respondes to "compelling market demand for allocations to infrastructure," noting that the trends shaping private markets present an opportunity to “broaden access to capital and advance the availability of investments in energy security, electrification, and digitalization.”
The partnership comes as global infrastructure needs are projected to blow past $94 trillion by 2040, according to one data point from the Global Infrastructure Outlook, which represents a $15 trillion capital opportunity for private investors by Franklin Templeton's estimation.
The firm, which manages $1.6 trillion in assets, is seeking to address this demand by leveraging the sector expertise of its new partners.
DigitalBridge, with $106 billion in assets under management, specializes in digital infrastructure such as data centers, fiber networks, and edge computing. Marc Ganzi, chief executive of DigitalBridge, said the partnership is designed to “broaden access to this asset class at a pivotal moment, as artificial intelligence, electrification, and next-generation connectivity accelerate demand for digital and energy infrastructure.”
Copenhagen Infrastructure Partners, which manages $37 billion, brings a focus on greenfield energy investments, while Actis, the sustainable infrastructure business of General Atlantic, has invested in critical infrastructure assets across power, transport, and digital sectors for more than two decades.
The move also highlights a shift in strategy among traditional asset managers. In an interview with the Financial Times, Johnson pointed to the widening valuation gap between traditional firms and fast-growing private capital groups, with rich multiples ascribed to alternatives managers, making acquisitions more difficult.
“It’s just hard to buy scale if you haven’t moved early,” she said, adding that partnerships can be “even better than acquiring.”
Franklin is no stranger to the business of strategic business acquisition. After a $4.5 billion deal to acquire Legg Mason in 2020, it went on to snap up O’Shaughnessy Asset Management, Lexington Partners, and Putnam Investments in the years up to 2023.
With respect to its infrastructure play, Bill Ford, chief executive of General Atlantic, said Franklin Templeton had “put together a set of complementary partners to create an exciting investment offering for individual investors.”
Rather than building out costly internal sales and distribution teams, the private capital groups involved in the partnership see the tie-up as a way to reach potentially millions of Franklin Templeton’s clients, which include the workplace retirement plan space. On that front, the California-based asset manager has also positioned itself well as one of several firms involved in Empower's bid to create more private-market access for 401(k) plan investors.
BlackRock, the world's largest asset manager with more than $12 trillion in AUM, also has its sights on the infrastructure space. Through a partnership with Global Infrastructure Partners struck last year, BlackRock has said it is looking to profit from a "golden age" of infrastructure investing driven by the energy transition, data centers, and reshaping the global supply chain, among other structural imperatives across the world.
More broadly, BlackRock is looking to hit $400 billion in private-markets fundraising by 2030.
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