Franklin Resources, a global investment management organisation operating as Franklin Templeton, has acquired Aviva Investors’ US-based Investment Grade Credit team, including senior portfolio managers Josh Lohmeier, CFA, and Michael Cho, CFA, to join Franklin Templeton Fixed Income (FTFI). In addition, Tom Meyers, CFA, previously Aviva’s Head of Americas Client Solutions, will join FTFI in a newly created role as SVP, Senior Director of Investments and Strategy Development, Fixed Income. Meyers, Lohmeier and the full investment team are expected to join by the end of 2021. Lohmeier and Meyers will report to Sonal Desai, CIO at FTFI, and the investment team will continue to report to Lohmeier.
The Investment Grade Credit team currently manages over USD7.5 billion in institutional AUM at Aviva, across its suite of investment grade credit strategies, including US Investment Grade Credit, US Long Duration Credit, US Long Duration Government/Credit, and US Intermediate Credit, with additional customised versions of each strategy for various institutional clients. Aviva clients in these strategies will have the opportunity to continue to have the team manage their assets at Franklin Templeton.
“Bringing this experienced team aboard will complement our existing credit capabilities by further deepening our expertise in investment grade credit, strengthening our research and analysis resources, and expanding our strategy offerings and capabilities further into the institutional marketplace, with a special focus on defined benefit and liability-driven investing,” says Desai. “I look forward to working with Josh and the team to bolster and differentiate our investment grade credit offerings, and with Tom to bring this messaging to our clients and consultants, especially in the institutional arena.”
This Investment Grade Credit team uses a differentiated portfolio construction process that breaks down and analyses credit markets in distinctive ways in order to uncover additional opportunities for alpha and risk reduction for clients. Utilising a custom risk framework and allocation system, the team aims to consistently deliver positive and uncorrelated excess returns through all market cycles, regardless of the direction of credit spreads, with a focus on downside protection.
“I’m thrilled to continue to grow the substantial client interest we have seen in our investment grade credit strategy, now with Franklin Templeton,” says Lohmeier. “Portfolio construction sets the strategy apart from its peers and is a key driver of its non-correlation. Our time-tested process is designed to add value by creating a more efficient portfolio and allocating to the best credit ideas.”
The Investment Grade Credit team’s approach and expertise are complementary to FTFI’s existing active quant investment process, which combines fundamental research-based active management with quantitative analysis and data science. In addition, the team’s investment philosophy and culture, built on the belief that a quantitative enhancement to fundamental research leads to more consistent and repeatable alpha generation, strongly aligns with FTFI’s existing culture.
“In the current environment, and especially within fixed income, we believe clients are looking for crisp differentiation and consistency,” says Meyers. “I look forward to working with Josh to continue to articulate the benefits of the investment grade credit strategies, and with the broader Franklin Templeton Fixed Income team in connecting clients with investment strategies that meet their diverse needs.”
Meyers will lead a newly formed team that will be responsible for representing FTFI’s global fixed income investment strategies. He will help set the strategy for engagement with clients, prospects, and intermediaries to discuss FTFI’s investment philosophy, process and performance. He will oversee the implementation of this strategy via a team of expert investment specialists and client-focused functions as an integrated part of FTFI’s investment team, focusing on partnership with key distribution channels to support business growth.
Franklin Templeton Fixed Income has USD156 billion in assets under management, with approximately USD13 billion of that in corporate credit strategies, as of 31 August, 2021. The firm’s existing Corporate Credit Research Team comprises 31 investment professionals, organized by region.
Lohmeier brings more than 18 years of investment management industry experience, including 12 years as a portfolio manager. He had served as Head of US Investment Grade Credit and Portfolio Implementation for Fixed Income at Aviva Investors and Investment Officer for the North American Region. Prior to joining Aviva, Lohmeier worked for AllianceBernstein and American Equity Investment Life Insurance Company as an investment grade portfolio manager. He is candidate for a master’s degree in Data Science from Northwestern University and has a bachelor’s degree in Finance from the University of Northern Iowa. He holds the Chartered Financial Analyst® designation.
Meyers brings over 35 years of experience in the investment management industry. He has served as Executive Director, Head of Americas Client Solutions for Aviva Investors, leading client solutions efforts covering the institutional market and sub-advisor relationships. He also oversaw Investment Specialist, Consultant Relations, Sales, Client Servicing and Marketing teams. Prior to joining Aviva, Meyers was Managing Senior Investment Director at Legal and General Investment Management America where he successfully launched its institutional efforts in the US. Meyers has also held senior distribution and investment positions at Seix Investment Advisors, Phoenix Investment Partners and Conseco Capital Management, and has served as a credit trader, research analyst, director of credit research and portfolio manager over the course of his career. He graduated Magna Cum Laude and Phi Beta Kappa from Brown University with a dual bachelor’s degree in Organizational Behavior and Management (Honors) and Psychology. He holds the Chartered Financial Analyst® designation.