New Africa Fund for Dr. Mobius as Franklin Templeton Seeks to Capture African Growth

Franklin Templeton Investments¹ has received verbal approval from the CSSF to launch the Templeton Africa Fund² , a sub-fund of its Luxembourg-registered SICAV range, Franklin Templeton Investment Funds (FTIF) and investors will be able to access this new Fund in May 2012.

The new Templeton Africa Fund seeks long-term capital growth by investing in equity securities in African countries or in companies based elsewhere but who have their principal business activities in Africa. The investment research team, split between Dubai, South Africa and Turkey, offers investors a diversified portfolio of companies across countries and sectors with exposure to secular growth trends on the African continent.

Dr. Mark Mobius, executive chairman, Templeton Emerging Markets Group and lead portfolio manager of the Fund commented, “We believe that Africa’s markets present significant opportunities for development due to a combination of strong economic growth, rising demand for the region’s vast natural resources, and a growing consumer market. Africa is expected to grow more than 7% annually in the next 20 years, due to an improving investment environment, better economic management and developed as well as emerging markets rising demand for the continent’s resources, all of which offers a compelling proposition to global investors. ³

Africa – a wealth of resources

The Templeton Emerging Markets Group believes that Africa is ideally positioned, not only for the strong growth rates the continent offers but also for its wealth of natural resources and the impact of a rising emerging middle class. Dr. Mobius continued: “Africa has impressive stores of resources, not only in minerals but also in agriculture — 60% of the world’s uncultivated arable land is found in Africa. ⁴ As global demand for hard and soft commodities continues to grow, we believe Africa is in an enviable position with its vast natural resources.”

He added: “Demographically, Africa’s growth should benefit from a relatively young population with rising purchasing power. The median age of the African population is 20, compared to 40 for the developed world, and it is estimated that in 10 years, the number of African households earning more than USD 5,000 will jump from 85 to 128 million.5 This rapid growth in income is an indicator of future expansion in the region with rising demand for goods, services and products which in turn helps to accelerate economic development.”

Dr. Mobius continued, “As larger emerging markets increasingly invest in Africa, we are seeing money funnelled toward infrastructure projects such as roads, bridges, schools and hospitals, all of which are likely to benefit African economies in the years to come. These measures help mitigate the investment risks present in Africa and promote a region that is gradually emerging with the development of capital markets, consumerism and technology.”

Dhiraj Rai, Director, Gulf & Eastern Mediterranean, Franklin Templeton Investment Management Limited commented:

“Franklin Templeton is delighted to be able to offer our investors in the region access to the wealth of opportunities that exist throughout the African continent. Retail and particularly institutional investors in the Middle East have shown interest in frontier markets as they look to access the fastest-growing economies in the world and we have seen a number of sizeable investments, particularly from the GCC region, being made in Africa. We are therefore confident that there will be a healthy level of demand for this fund.

"Dr Mobius and his team, through a robust on-the-ground presence and a bottom-up stock-picking approach, believe that some of the same characteristics they observed in economies such as China and India decades ago are now in evidence in a number of African economies. Therefore, we believe the time is right for investors to consider their exposure to the African continent.”

Templeton Emerging Markets Group

Dr. Mobius is supported by the Templeton emerging markets team of over 50 investment professionals. They bring 20 years of first-hand knowledge of investing in Africa and the ability to capitalise on opportunities others may fail to uncover. The team has offices in 17 locations, including offices in Cape Town and Johannesburg. The Templeton Emerging Markets group has been covering and investing in Africa for close to 20 years and conducts around 300 company calls and visits annually in Africa to assess company management, corporate governance and gain a better understanding of the socio-economic and political environment in which they operate.

A pioneer in emerging markets investing, Templeton Emerging Markets group, launched its first mutual fund dedicated to emerging markets in 1987. The group first started investing in Africa in 1990 and opened its research office in Johannesburg in 1995. Templeton has consistently adhered to a bottom-up stock selection process and strict value discipline throughout its history, enduring many different market cycles and offering investors a truly global perspective. The team manages over USD 256 million in African equities across its emerging markets portfolios.

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Disclaimer

This press release is intended to be of general interest only, and does not constitute professional advice. Franklin Templeton Investments and its management groups have exercised professional care and diligence in the collection and processing of the information in this press release. Franklin Templeton Investments makes no representations or warranties with respect to the accuracy of this document. Franklin Templeton Investments shall not be liable to any user of this report or to any other person or entity for the inaccuracy of information contained in this press release or for any errors or omissions in its contents, regardless of the cause of such inaccuracy, error or omission. Any research and analysis contained in this document has been procured by Franklin Templeton Investments for its own purposes.

Issued by the branch of Franklin Templeton Investment Management Limited in Dubai (“FTIML”), authorized and regulated in the UK by the Financial Services Authority and regulated in Dubai by the DFSA. This marketing material is directed at professional clients. Dubai office: Franklin Templeton Investment Management Limited, Gate Building, 2nd floor, East Wing, Dubai International Financial Centre, P.O. Box 506613, Dubai, U.A.E., Tel.: +9714-4284100 Fax:+9714-4284140, www.franklintempletongem.com

 

Notes to Editors:

1. Franklin Templeton Investment Management Ltd is a wholly owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment organisation operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and local investment management solutions managed by its Franklin, Templeton, Mutual Series, Darby and Bissett teams. The San Mateo, CA-based company has more than 60 years of investment experience with over $725.7 billion in AUM as of March 31, 2012.

2. Templeton Africa fund is a sub-fund of Franklin Templeton Investment Funds, a Luxembourg-domiciled SICAV range. For further information, please refer to the latest Full or Simplified Prospectus. Past performance is no guarantee of future performance. This document does not constitute or form part of any offer for shares or an invitation to apply for shares. Subscriptions for shares can only be made on the basis of the latest available audited annual report accompanied by the current prospectus or Simplified Prospectus (available from the address below). The price of the shares of the Funds and the income received from them can go down as well as up, and investors may not get back the full amount invested. Currency fluctuations may affect the value of overseas investment. An investment in the Franklin Templeton Investment Funds SICAV entails risks, which are described in the Full or Simplified Prospectus. No shares of the SICAV may be directly or indirectly offered or sold to nationals or residents of the United States of America.

3. Source: The Super-Cycle Report, Standard Chartered Bank, as of November 15, 2010.

4. Source: McKinsey & Company, Asia should buy into Africa’s growth, as of August 12, 2010.

5. Source: World Bank, Feature Stories: Concessional Funding Key to Unlock Africa’s Agriculture, as of January 29, 2011.

Past performance is no guarantee of future performance. This document does not constitute or form part of any offer for shares or an invitation to apply for shares. Subscriptions for shares can only be made on the basis of the latest available audited annual report accompanied by the current prospectus or Simplified Prospectus (available from the address below).

For more information on our Funds, please visit our website www.franklintempletongem.com

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