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New chapter for Franklin Templeton – Investment Executive

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This chapter started with the 2020 acquisition of Legg Mason and its specialist investment managers by Franklin Templeton’s parent company. That acquisition gave Franklin Templeton a combined US$1.5 trillion in assets under management globally, as of June 30, 2021.

Most important, the move strengthened Franklin Templeton’s investment capabilities across a wider range of asset classes, and enhanced its expertise in sustainable investing.

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In March 2021, the firm established a Stewardship and Sustainability Council. Its members represent the diversity and depth of Franklin Templeton’s approaches, as well as each specialist investment manager. Council members are responsible for identifying how to face universal sustainability challenges.

This framework is reinforced by a Global Sustainability Strategy Team, whose mandate is to drive and embed sustainability across the organization.

“We’re bringing new investment capabilities and sustainability expertise to Canadian investors through different platforms,” says Green.

Franklin Templeton’s specialist investment managers have expertise in different areas:

  • ClearBridge Investments: global equities
  • Brandywine Global: long-term value investing
  • Martin Currie: global active equities
  • Royce Investment Partners: small cap specialist
  • Western Asset: global fixed income
  • Clarion Partners: real estate

Together, these proven managers complement the strengths and experience of Franklin Templeton’s legacy investment teams.

Each of Franklin Templeton’s boutique investment teams is autonomous. Being entrepreneurial and independent lets them practise true investment specialization, while tapping into global resources for analytics, data, distribution and servicing support. The firm believes that these experienced investment managers offer differentiated strategies to help Canadians meet their investment goals.

Franklin Templeton delivers these capabilities in the investment vehicles that Canadians want, including mutual funds, ETFs and separately managed accounts (SMAs). With the ability to customize and offer more bespoke offerings to larger institutional clients.

Green says the firm’s new era is about expanding capabilities, to address the needs and wants of Canadian investors. For advisors, the goal is providing a range of differentiated, quality solutions that will truly make a difference to client portfolios.

Focus on sustainability

A big part of that is offering sustainable solutions. The ethical and business cases behind sustainable investing are clear, along with its growing importance to investors.

There’s an increasing body of evidence that points to sustainability as a theme for continued fund inflows. Morningstar reported that, at the end of the second quarter of 2021, sustainable assets in Canada (excluding fund of funds) hit $26 billion. That reflects a year-over-year growth rate of 130%.1

Some of Franklin Templeton’s boutique investment teams have prioritized investing according to sustainability principles for years.

For example, in 2020, Martin Currie received an A+ from the UN’s Principles for Responsible Investment (PRI) across all three pillars (Strategy and Governance, Listed Equity Incorporation, and Active Ownership), for the fourth consecutive year.2 The PRI is a voluntary framework for companies who commit to integrate ESG factors into their investment analysis and decision-making.

ClearBridge Investments, a leader in sustainable investing for more than 30 years, was recently appointed manager of the Franklin ClearBridge International Growth Fund, and its ETF version, Franklin ClearBridge Sustainable International Growth Active ETF (FCSI). Franklin Templeton clients will benefit from ClearBridge’s proprietary ESG research process, and commitment to driving positive change through long-term engagement with companies.

In looking at companies and funds, ESG performance is being incorporated more and more into investment management processes. These are important considerations for all advisors and investors.

Franklin Templeton says part of successful investing is reinforcing sustainable ESG structures, which create the conditions for issuers to succeed. Investment managers and other shareholders must provide strong engagement and demonstrate active ownership.

ESG indicators can also provide material insights not yet captured by the market. Identifying those insights can allow Franklin Templeton to target investments they believe are best positioned to deliver sustainable returns for their clients.

Franklin Templeton has long had strong ESG capabilities, going back many decades to the practices of Sir John Templeton. Now, a key benefit of the Legg Mason acquisition is access to a global network of credible ESG experts in its new investment teams.These capabilities are being made available to Canadian investors through mutual funds and ETFs.

For example, the Franklin Brandywine Global Income Optimiser Fund has ESG analysis embedded into its investment process. The weakest ESG scoring securities may be limited in exposure, or even excluded, from the portfolio of the mutual fund and its ETF version, FBGO.

The portfolio management team behind Franklin Martin Currie Sustainable Emerging Markets Fund, and its ETF version, FSEM, have also earned acclaim for responsible investing.

Adding these teams’ expertise to Franklin Templeton’s ESG framework is a catalyst in bolstering a firm-wide commitment to be responsible stewards of clients’ assets.

Today, over 93% of the company’s assets under management represent strategies that consider ESG factors in the investment process. Assets with a specific focus on ESG total over US$175 billion.3

 Helping advisors to succeed

This focus is helping advisors to succeed, says Green.

“Sustainability is top of mind for Canadian investors, so we have to be proactive and nimble in anticipating what advisors and their clients need and responding accordingly,” he says.

To further support advisors throughout the pandemic, Franklin Templeton has provided timely information and analysis from its investment experts amid the volatility and uncertainty. The company has invested in technology and created a flexible structure to ensure we are servicing our clients in the way that makes sense for their business.

Another valuable resource is the Franklin Templeton Academy, which offers advisors a wealth of free online modules. Users can review them 24/7, at their own pace, and earn continuing education credits.

The courses cover everything from ESG investing, exchange-traded funds, and hedge funds, to strengthening your personal brand and social media presence. Whatever the topic, the Franklin Templeton Academy helps users to gain knowledge, improve the efficiency of their practices, build their businesses, and, ultimately, be better advisors for their clients.

“We’ve worked hard to become a closer partner to advisors by offering great solutions and service, effective communication and value-add programs,” says Green. “I want financial advisors to give us a fresh look to see what we can do to help their clients and build their businesses.”

Improved ESG capabilities, new sustainable strategies and stronger communications with advisors are all part of the new era for Franklin Templeton Canada. “This is only the beginning,” says Green.


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Amazon completes $4B Anthropic investment to advance generative AI – About Amazon

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Amazon concludes $4 billion investment in Anthropic.

Customers of all sizes and industries are using Claude on Amazon Bedrock to reimagine user experiences, reinvent their businesses, and accelerate their generative AI journeys.

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The work Amazon and Anthropic are doing together to bring the most advanced generative artificial intelligence (generative AI) technologies to customers worldwide is only beginning. As part of a strategic collaborative agreement, we and Anthropic announced that Anthropic is using Amazon Web Services (AWS) as its primary cloud provider for mission critical workloads, including safety research and future foundation model development. Anthropic will use AWS Trainium and Inferentia chips to build, train, and deploy its future models and has made a long-term commitment to provide AWS customers around the world with access to future generations of its foundation models on Amazon Bedrock, AWS’s fully managed service that provides secure, easy access to the industry’s widest choice of high-performing, fully managed foundation models (FMs), along with the most compelling set of features (including best-in-class retrieval augmented generation, guardrails, model evaluation, and AI-powered agents) that help customers build highly-capable, cost-effective, low latency generative AI applications.

Earlier this month, we announced access to the most powerful Anthropic AI models on Amazon Bedrock. The Claude 3 family of models demonstrate advanced intelligence, near-human levels of responsiveness, improved steerability and accuracy, and new vision capabilities. Industry benchmarks show that Claude 3 Opus, the most intelligent of the model family, has set a new standard, outperforming other models available today—including OpenAI’s GPT-4—in the areas of reasoning, math, and coding.

“We have a notable history with Anthropic, together helping organizations of all sizes around the world to deploy advanced generative artificial intelligence applications across their organizations,” said Dr. Swami Sivasubramanian, vice president of Data and AI at AWS. “Anthropic’s visionary work with generative AI, most recently the introduction of its state-of-the art Claude 3 family of models, combined with Amazon’s best-in-class infrastructure like AWS Tranium and managed services like Amazon Bedrock further unlocks exciting opportunities for customers to quickly, securely, and responsibly innovate with generative AI. Generative AI is poised to be the most transformational technology of our time, and we believe our strategic collaboration with Anthropic will further improve our customers’ experiences, and look forward to what’s next.”

Global organizations of all sizes, across virtually every industry, are already using Amazon Bedrock to build their generative AI applications with Anthropic’s Claude AI. They include ADP, Amdocs, Bridgewater Associates, Broadridge, CelcomDigi, Clariant, Cloudera, Dana-Farber Cancer Institute, Degas Ltd., Delta Air Lines, Druva, Enverus, Genesys, Genomics England, GoDaddy, Happy Fox, Intuit, KT, LivTech, Lonely Planet, LexisNexis Legal & Professional, M1 Finance, Netsmart, Nexxiot, Parsyl, Perplexity AI, Pfizer, the PGA TOUR, Proto Hologram, Ricoh USA, Rocket Companies, and Siemens.

To further help speed the adoption of advanced generative AI technologies, AWS, Anthropic, and Accenture recently announced that they are coming together to help organizations—especially those in highly-regulated industries including healthcare, public sector, banking, and insurance—responsibly adopt and scale generative AI solutions. Through this collaboration, organizations will gain access to best-in-class models from Anthropic, a broad set of capabilities only available on Amazon Bedrock, and industry expertise from Accenture, Anthropic, and AWS to help them build and scale generative AI applications that are customized for their specific use cases.

Deepening our commitment to advancing generative AI, today we have an update on the announcement we made to invest up to $4 billion in Anthropic for a minority ownership position in the company. Last September, we made an initial investment of $1.25 billion. Today, we made our additional $2.75 billion investment, bringing our total investment in Anthropic to $4 billion. To learn more about the broader strategic collaboration between Amazon and Anthropic, of which this investment is one part, check out the stories below:

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Amazon doubles down on Anthropic, completing its planned $4B investment – TechCrunch

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Amazon invested a further $2.75 billion in growing AI power Anthropic on Wednesday, following through on the option it left open last September. The $1.25 billion it invested at the time must be producing results, or perhaps they’ve realized that there are no other horses available to back.

The September deal put $1.25 billion into the company in exchange for a minority stake, and certain tit-for-tat agreements like Anthropic continuing to use AWS for its extensive computation needs.

Amazon reportedly had until the end of the first quarter to decide whether to increase its investment to a maximum of $4 billion, and here we are just before the deadline, and the company has decided to throw in the maximum amount.

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Anthropic’s AI models are one of very few that compete at the highest levels of capability (however you define it) yet are available at scale for enterprises to deploy internally or in user-facing applications. OpenAI’s GPT series and Google’s Gemini are the others up there, but upstarts like Mistral may soon threaten that fragile triumvirate.

Lacking the capability to develop adequate models on their own for whatever reason, companies like Amazon and Microsoft have had to act vicariously through others, primarily OpenAI and Anthropic. The two have reaped immense benefits by allying with one or the other of these moneyed rivals, and as yet have not seen many downsides.

What we can take from Amazon’s decision to invest the maximum after (one must assume) getting a pretty close look at how they make the AI sausage over there is, really, pretty scant.

It makes too much strategic sense for these companies, which possess enormous war chests saved up for exactly this purpose (outspending rivals when they can’t out-innovate them), to pour cash into the AI sector. Right now the AI world is a bit like a roulette table, with OpenAI and Anthropic representing black and red. No one really knows where the ball will land, least of all the companies that couldn’t predict or create this technology themselves. But if your bitter enemy puts their chips down on red, it only makes sense for you to bet on black.

Especially if you can bet on black at a discount — which is what Amazon got here, since it could invest at Anthropic’s September valuation, which is most certainly lower than it is today.

That said, if things were looking sketchy over there — the way they must have looked at Inflection before Microsoft pounced on it — Amazon could have backed out or just invested less than the full supplemental $2.75 billion. But that might have sent a confusing signal no one wants getting out there, least of all existing multibillion-dollar investors.

We know Anthropic has a plan, and this year we’ll find out what Amazon, Apple, Microsoft and other multinational interests think they can do to monetize this supposedly revolutionary technology.

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Canada to tighten foreign investment rules for AI, other sectors

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Canada will require foreign companies to warn the government in advance before making investments or acquisitions in artificial intelligence, quantum computing and space technology, Bloomberg News reported on Tuesday, citing an interview with Innovation Minister Francois-Philippe Champagne.

The move will aid the government in conducting a national-security review before transactions get too far advanced and would-be investors may be restricted in their access to target companies’ user data or other property while the inquiry is taking place, the report said.


Click to play video: 'Canadians concerned about risk of AI generated fraud'
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Canadians concerned about risk of AI generated fraud

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The tougher rules will also apply to investments in critical minerals and potentially other sectors, Champagne said to Bloomberg.

Earlier this month, Champagne said Canada will crack down on foreign investment in the interactive digital media sector to stop state-sponsored actors from endangering national security.

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