March 1, 2018 / 5:41 PM / 3 months ago

Franklin Templeton launches Argentina partnership for fixed income

BUENOS AIRES, March 1 (Reuters) - U.S.-based investment manager Franklin Templeton Investments has launched a partnership with Grupo SBS under which it will advise funds catering to Argentine investors and sold by the Buenos Aires-based fund manager, the companies said.

Under the arrangement, Franklin Templeton will advise on three fixed-income mutual funds that SBS plans to relaunch, including one focused on peso-denominated debt, one focused on dollar-denominated debt, and a third focused on fixed-income assets elsewhere in Latin America.

“It is an alliance in which Franklin Templeton will act as an investment adviser for the funds that we administer,” SBS director Leandro Trigo said in a telephone interview on Thursday.

SBS hopes to grow the assets invested in the three mutual funds to $1 billion, up from around $200 million now, Trigo said.

The move comes as investor interest in Argentine financial assets grows amid President Mauricio Macri’s reform push following more than a decade of populist rule. The Merval stock index has surged 21 percent since his “Let’s Change” coalition swept midterm elections last October.

But Congress has not yet approved a proposed reform to the country’s capital markets law, which could attract global asset managers to set up shop in the country. The law would limit the local market regulator’s ability to intervene in company boards and allow for local advisers to invest citizens’ funds abroad.

“Due to the potential regulatory changes in Argentina, we think there is a window for opportunities in local savings,” Sergio Guerrien, Franklin Templeton’s director for South America excluding Brazil, was quoted as saying in a press release.

In the release, Franklin Templeton also said that it had named Lionel Modi as vice president for the company’s fixed-income group, based in Buenos Aires. (Reporting by Luc Cohen; additional reporting by Christian Plumb in New York; editing by Jonathan Oatis)

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