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Franklin Resources Inc (NYSE:), a global investment management organization, has reported a decrease in its operating revenues and net income for the fiscal year 2023, according to its latest 10-K filing on Tuesday. Despite the downturn, the company highlighted its robust global diversification and strong financial position, with total managed assets reaching $1.335 trillion.
The San Mateo-based firm saw its operating revenues decline to $7,849.4 million in 2023 from $8,275.3 million the previous year. Net income also fell, coming in at $1,103.4 million compared to $1,333.2 million in 2022. The earnings per share remained solid at $1.72.
Franklin Resources’ asset composition showcases its global reach, with managed assets spread across various categories:
- Equity: 31%
- Fixed-income: 35%
- Alternatives and multi-asset/balanced funds: substantial portions
Additionally, the company has a significant international footprint, with more than a third of its managed assets invested in global/international strategies and 29% of its clientele based outside the United States.
Despite the reduced revenue and net income figures, Franklin Resources continues to maintain a strong financial footing. However, the company faces increased operational costs, particularly in compensation and benefits, which have risen from $3,089.8 million to $3,494.0 million.
Looking ahead, Franklin Resources identifies sustainable investing and ESG-focused products as key growth areas due to rising investor interest in responsible investment options. Technological advancements are also seen as an avenue for improving operational efficiency and client services.
The company acknowledges that it operates within a highly regulated environment and that regulatory changes could pose significant challenges to its business operations. Additionally, market volatility is cited as another potential risk factor that could impact asset valuations and investor behavior.
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