US firm increases stake in Dubai fund manager

STAKE INCREASED: US firm Franklin Templeton Investments is upping its stake in Dubai's Algebra Capital. (Getty Images)

Franklin Templeton Investments has increased its equity stake in Algebra Capital, the Dubai-based fund manager, to 40 percent, the US asset management firm said on Monday.

The investment was in recognition of the long-term opportunities in the Middle East North Africa (MENA) region, said William Y Yun, executive vice president of alternative strategies for Franklin Templeton Investments and a director of Algebra Capital.

The strategic relationship between the two companies was originally formed in September 2007 when Franklin Resources, the parent company of Franklin Templeton, acquired a 25 percent stake in Algebra Capital.

Local and regional investors, including MENA-based sovereign wealth funds, were refocusing on investment opportunities closer to home as a consequence of continued volatility in global markets, said Yun in a statement.

“While the credit crisis has not spared our markets, the MENA region remains one of the fastest growing regions in the world with substantial wealth and relatively low levels of leverage – attractive attributes in this uncertain global economy,” he said.

Yun now joins two other Franklin Templeton directors on the Algebra Capital board.

The increased stake gave Algebra Capital the financial, distributional and operational means to remain a leading player, said Ziad Makkawi, chief executive officer and founder of Algebra Capital.

To date, Franklin Templeton and Algebra Capital have launched and marketed five MENA equity funds worldwide.

The MENA region is the world’s eighth-largest economic bloc, with a market capitalisation of over $750bn, as of December 2008.

California-based Franklin Templeton has over $377bn in assets under management and also operates in markets in Brazil, Canada, China, India, Japan and South Korea.

Operating out of the Dubai International Financial Center (DIFC), Algebra Capital is one of the leading asset managers in the MENA region, offering listed equities, fixed income and private equity to both regional and international institutional investors.

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