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Franklin Templeton is looking to establish an office in Saudi Arabia to deepen its access to the Middle East’s largest economy, according to people familiar with the matter.

Chief Executive Officer Jenny Johnson has earmarked the kingdom as a major expansion market for the asset manager, the people said, asking not to be named because the information is private.

The New York-based firm, which oversees some $1.5 trillion worth of assets, plans to start the regulatory licensing process that will enable it to build a presence in Riyadh, where it will have investment teams and some sales and support on the ground, the people said. The office will be staffed through a mix of new recruits and internal transfers, including from the company’s Dubai office.

A spokeswoman for Franklin Templeton described Saudi Arabia as “an important market” in the region. “While we have not announced any new office openings, we are currently exploring options to grow our regional footprint and will share details in due course,” she said.

Saudi Arabia is home to one of the biggest equity markets in the world, largely thanks to state-owned oil giant Aramco.

Finance Hub

Saudi Arabia opened up its stock market to foreign investors in 2015 and some asset managers, including BlackRock Inc., have already established offices in the country as it positions itself as a finance hub for the Middle East.

Saudi Arabia’s economy is rebounding on the back of surging oil prices, its principal source of income. The kingdom is in the middle of re-engineering its petrol-dependent economy, introducing a wide array of reforms aimed at attracting foreign investments and diversifying the country away from oil. It’s also signaled to foreign firms the need to set up regional headquarters in the kingdom. 

The economic efforts and ensuing deals activity have attracted an increasing number of foreign financial firms. Some, like Moelis & Co., are setting up offices. Others are expanding existing operations, with HSBC Holdings Plc recently moving at least 5 bankers to Riyadh.

Franklin Templeton, which has been in the Middle East for two decades and has an office in Dubai with around 40 employees, is already active in the kingdom. Its funds became “qualified foreign investors” in 2018, allowing them to invest directly in Saudi Arabia’s stock market.

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