Team Franklin Templeton is traveling through the Middle East and Eastern Europe working with Franklin Templeton, a global money manager, on a project to help better understand the business opportunities throughout their “CEEMEA” region (Central & Eastern Europe, Middle East, & Africa), and to provide a go-forward recommendation for business penetration in Israel and Turkey.
Our project began with a 9-day visit to Israel, where we were based in Tel Aviv, a central business hub for many financial services firms. Our experiences here would allow us to both understand the financial markets, as well as gain an appreciation for local culture, the people, and what makes Israel such an attractive business opportunity. There were several areas that we wanted to highlight as both educational and fulfilling during our travels in Israel:
Business Meetings: Franklin Templeton arranged for us to meet 13 different players in the mutual fund market in Israel, including the country’s largest banks and insurance companies, independent financial advisers, local asset managers, funds-of-funds, and investment houses. These meetings were usually with senior executives, including the CEO of the local office for one of the largest international banks in Israel.
One of our final meetings, and the most interesting in canvassing the business opportunity for Franklin Templeton, was with the senior regulating body, the ISA (Israeli Securities Authority – the SEC equivalent). There we met with the key decision maker in charge of a piece of legislation that, if approved, may greatly change the money management landscape. This new law will open up distribution of foreign financial products to local retail investors, allowing Franklin to actively sell their products to everyday people in Israel, rather than only to sophisticated institutional investors, as is the current case. However, drafts of this law have been circulating for nine years, and in reading through various versions, we had many questions for why the ISA was so hesitant to pass the bill. Ultimately the latest revision, titled Amendment 21, will again be up for discussion in August, and our thoughts and recommendations of how Franklin Templeton should position their business for the possible change is a critical element of our project and business analysis of the Israeli opportunity.
On the one hour drive to Jerusalem for the ISA meeting, we had the chance to further get to know our two Franklin Templeton hosts, Borno and Szabolcs, who were in charge of managing the Israel leg of our travels.
With our nerves building as we approached the pivotal meeting with the regulators, we decided some situational-appropriate music was in order. The classic American song “Regulators” by Warren G, a favorite of both Borno and Szablocs, perfectly fit the bill. Our cab driver was into it as well and let us plug into his sound system, a rich demonstration of diverse backgrounds sharing a moment together.
Cab To ISA With Franklin Team [notice Borno enjoying the music in the front seat]
The meeting was quite successful, and afterwards, we were able to spend some time with our hosts who gave us a great tour of Jerusalem.
The Sights and Landmarks: One of the things we learned during our tour of the Old City in Jerusalem was just how many important landmarks lay within a few mile radius of central Jerusalem, and how important this city is in the religious context of many different beliefs. People of Jewish, Christian, and Muslim faiths all believe that significant events took place in this small area, a contributing factor to why it is such an important city, as well as a point of tension amongst various groups. Our time in Jerusalem seeing the Western Wall, The Tower of David, The Dome of the Rock, and the Church of the Holy Sepulchre helped put this city’s spiritual importance into perspective, especially relative to the business/social-centric lifestyle we had observed in Tel Aviv.
People’s Pride In Israel: All that said, one dynamic we observed universally throughout Israel was the local people’s pride in their country and their appreciation for our visit. Almost every meeting began with the client thanking us for visiting their country, as well as explaining why they believed Israel was such a great place to live and work. One of the senior executives at Mizrahi (a bank), in addressing what he believed to be foreigner’s perception of the situation in Israel, put it best when he said, “We are in essence surrounded by seven ‘North Koreas’, but life continues”. He was referring to the prosperity of the city and the people, despite conflict on neighboring borders, and really, the pride that Israel continues to grow and succeed despite these tensions.
Every Israeli we met, from the business representatives at our meetings, to the locals relaxing along the beach on Friday (the first day of the weekend in Israel), were all proud to welcome us into their country. Many even offered to show us around and, in fact, a young couple we met during the week brought us to the beach on Friday and introduced us to the exciting nightlife of Tel Aviv on the weekend.
Ultimately the experiences here, both professionally and personally, have been incredible and we have gained a much better understanding of why Franklin Templeton is excited for the possibility of expanding in the country. It is now up to us to provide a strong case of how to do this, in the framework of our IBD class and final project, with the hope that Franklin will be successful in this dynamic and rapidly changing market.