Franklin Templeton Team Continues Travels with Visit to Istanbul

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.

Following our 9-day visit to Israel, the Franklin Templeton IBD team traveled to Istanbul, Turkey, where we met two new business representatives who cover the region.  Our first three days in Istanbul were jam-packed as we met with financial regulators, banks, pension funds, and independent advisors.  Similar to Israel, the people here have all been so welcoming, generous with their time, and excited to speak about the opportunities they see in Turkey, one of the most exciting and fastest-growing markets in the world.

Even before we landed, it started to become clear that Turkey is a huge opportunity, in both scale and scope.  Our flight into the city gave us the first glimpse of Istanbul’s sheer size (over 13mm and growing).

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Our flight took us over the heart of Istanbul and the Bosphorus – the strait that divides the European and Asian sides of the city, and one of the world’s busiest waterways

After 2 days on-the-ground, and with 8 meetings under our belt, we were in agreement that this market is ready for FT’s full attention.  Our interview questions thus shifted away from “market opportunity” and towards “market penetration” as we started to learn more about regulatory licensing, personnel, corporate structure, and capital adequacy requirements, should FT execute a local-presence plan.

Despite an intense schedule of meetings, the team was also able to appreciate some of the sights and sounds that make this such a remarkable and vibrant city.  We took a half day on Saturday to explore some of the most famous areas of Istanbul.

The Blue Mosque from afar

The Blue Mosque from afar

Inside of The Blue Mosque

Inside of The Blue Mosque

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Picture inside the Hagia Sophia

We were also afforded the opportunity to taste some of the local cuisine, set amidst some of the most beautiful hillsides and waterways we have seen during our travels.

Our first evening in Istanbul, hilltop restaurant along the Bosphorus.

Our first evening in Istanbul, hilltop restaurant along the Bosphorus

Team dinner after our final meeting.

Team dinner after our final meeting

During our project work we were reminded how global the Haas and IBD network truly stretches, as our group ran across our own Dean Lyons in our hotel!  The Dean was visiting Istanbul to host an event for alumni and local business/education representatives about Innovative Leadership.   We were invited to attend and, as always, Dean Lyons’ speech was inspirational and brilliantly said.  We all really enjoyed being able to hear his thoughts and meet fellow Haas alum 6,500+ miles from Berkeley.

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Dean Lyons presenting on Innovative Leadership

Even on the streets of Istanbul, we found locals wearing shirts and hats that reminded us of home.

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Prior to our final meeting in Istanbul, we found a local security guard in a not-so-official security uniform

Ultimately, our mandate in Istanbul is to provide a recommendation of whether (and how) to enter the local asset management market.  As part of our project, we are to consider both the economic, political and socio-economic conditions of both Turkey and the 100 other countries in the CEEMEA region for Franklin Templeton.

While in Turkey, we were witness to a bit of the recent political unrest, a condition that has been absent for many years.  In seeing the citizens’ demonstrations against certain restrictive government policies, we were reminded that the business opportunities that come from entering an emerging market also come with a set of risks.  These risks are different in each of the countries we are evaluating, but are at the heart of what justifies our project.  Naturally this makes providing a thoughtful recommendation critical, and uniquely challenging, for each market.

The city center where citizens congregated to protest select government policies

The city center where citizens congregated to protest select government policies

Ultimately, our group is very excited about the opportunities we found here in Turkey.  As we work toward our final presentation, to be delivered on Thursday to FT’s local executives in Dubai, we must develop a thorough and high-impact recommendation.  Our presentation will help position FT in this rapidly growing economy and pave the way for FT to be a market-leading money manager as Turkey’s global economic position continues to rise.

Franklin Templeton Team Begins Travels in Israel

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.

Several clients provided thorough presentations with their views on the market, including this meeting at UBS.

Several clients provided thorough presentations with their views on the market, including this meeting at UBS.

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.

Meeting with the ISA in Jerusalem, where Borno, the Franklin Templeton representative, is wearing a Cal hat!

Meeting with the ISA in Jerusalem, where Borno Janekovic (the Franklin Templeton representative, far right) is wearing a Cal hat!

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.

A view of the Old City and the x

A view of the Old City and The Dome Of The Rock

Inside the Church of the Holy Sepulchr

Inside the Church of the Holy Sepulchr

A ceremony being conducted within the church where Jesus is believe to be buried.

A ceremony being conducted within the church where Jesus is believe to be buried.

Visiting The Western Wall in Old City Jerusalem, where we were asked to wear a Kippah, or Yamaka, in respect of the site.

Visiting The Western Wall in Old City Jerusalem, where we were asked to wear a Kippah, or Yamaka, in respect of the site.

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.

Friday, before the Sabbath begins, most locals enjoy the constant sunshine of Tel Aviv, by heading down to the local beach

The view from our hotel.  On Friday, before the Sabbath begins, many locals enjoy the constant sunshine of Tel Aviv by heading to the local beaches

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.