Franklin Resources (NYSE:BEN) reported higher adjusted earnings and broad-based client inflows for fiscal 2026, prompting the asset manager to raise its long-term targets for private markets fundraising, exchange-traded funds, its Canvas platform and profitability.
The company ended the fiscal year on September 30 with $1.8 trillion in assets under management and $84.1 billion in long-term net inflows, an improvement of more than $181 billion from fiscal 2025. CEO Jenny Johnson said long-term flows were positive in every quarter across all regions and in both retail and institutional channels.
Adjusted operating income rose 23% for the year to $2.02 billion, while the adjusted operating margin expanded 350 basis points to 28%. Adjusted diluted earnings per share increased 38.3% to $3.07.
Quarterly Results and Client Flows
In the fiscal fourth quarter, adjusted operating revenue increased 3.7% from the preceding quarter to $1.88 billion, helped by higher average assets, an additional calendar day and $94 million in performance fees. Adjusted operating expenses declined 1.7% to $1.29 billion.
Adjusted operating income rose 17.6% sequentially to $598.6 million, and the adjusted operating margin reached 31.8%. Adjusted net income increased 27.7% to $493 million, while adjusted diluted earnings per share rose 30.6% to $0.94.
Fourth-quarter long-term net inflows were $20.8 billion, with positive contributions from equity, alternatives and multi-asset strategies, Johnson said. The company ended the year with $22 billion in institutional mandates that had been won but not yet funded.
For the full year, equity assets reached a record $764 billion, supported by $21.1 billion in net inflows. Fixed income assets totaled $428 billion, with net outflows moderating to approximately $700 million. Alternatives and multi-asset strategies together generated $63.7 billion in net inflows.
Johnson said preliminary October assets rose to $1.81 trillion, helped by markets and $3 billion in long-term net inflows. It was the company’s 11th consecutive month of positive long-term net flows.
Higher Growth Targets
Two years into its five-year strategic plan, Franklin raised several fiscal 2029 goals after growth exceeded its original expectations. The revised targets include:
- Private markets fundraising: $150 billion, up from $100 billion.
- ETF assets: $200 billion, up from $93 billion.
- Canvas assets: $100 billion, double the prior $50 billion target.
- Adjusted operating margin: 35% for the fourth fiscal quarter of 2029, up from the original 30% goal.
Alternative assets reached a record $305 billion at year-end. Franklin raised $43.2 billion in private markets during fiscal 2026, bringing its fundraising since fiscal 2024 to approximately $66 billion. Johnson said the revised target assumes organic growth and does not include future acquisitions.
Johnson expects private markets fundraising in fiscal 2027 to be in the mid-$30 billion range, with the final figure partly dependent on demand in the collateralized loan obligation market. Approximately $11 billion of fiscal 2026 fundraising came from Lexington’s Flagship 11 fund, which she said is expected to continue fundraising into 2028.
ETF assets reached $84.6 billion, with $27.5 billion in net inflows during fiscal 2026. Canvas assets doubled to $32.6 billion, supported by $13.2 billion in net inflows. Co-President and Chief Commercial Officer Daniel Gamba said direct indexing and tax optimization of fundamental equity portfolios have been the main drivers of Canvas growth, while its long-short offering remains at an early stage.
Fiscal 2027 Outlook
Co-President and CFO Matt Nicholls said Franklin expects an adjusted operating margin of approximately 30% in fiscal 2027, which would meet its original five-year goal two years early. The company’s guidance assumes flat markets.
At the current level of assets, adjusted operating expenses excluding performance fee compensation are expected to be in line with or slightly above fiscal 2026 levels, at approximately $5.1 billion. Nicholls said the company had identified approximately $75 million in savings for fiscal 2027, with reinvestment expected to be at least as significant.
For the fiscal first quarter, Franklin expects its adjusted effective fee rate, excluding performance fees, to remain in the mid-37 basis-point range. Guidance for compensation and benefits of approximately $975 million assumes $125 million in performance fees at a 55% payout.
Nicholls said Franklin expects its fee rate to remain relatively stable over the next several years, all else being equal, as higher-fee private markets fundraising offsets growth in lower-fee businesses such as ETFs and Canvas. He also said the company expects higher performance fees in the next several quarters, citing activity involving venture capital investments in companies with prominent initial public offerings.
On acquisitions, Johnson said Franklin remains interested in targeted additions, particularly in private credit and high-net-worth wealth management. She identified scaled private infrastructure as a significant remaining capability gap. Franklin completed its acquisition of Apera Asset Management during fiscal 2026 and announced a majority-stake acquisition of European real assets manager Stoneshield Capital.
About Franklin Resources (NYSE:BEN)
Franklin Resources, Inc, operating under the Franklin Templeton name, is a global investment management organization headquartered in San Mateo, California. The company provides investment solutions to individuals, financial professionals, institutions, and other clients worldwide.
Its products and services include mutual funds, exchange-traded funds, separately managed accounts, institutional portfolios, and alternative investment strategies. Through its investment teams and specialist affiliates, Franklin Templeton offers capabilities across equities, fixed income, multi-asset strategies, private markets, real assets, and other areas of asset management.
Franklin Resources was founded in 1947 by Rupert H.
