InvestorQ : What is the status of the six funds of Templeton that were shut down in late April 2020?
rhea Babu made post

What is the status of the six funds of Templeton that were shut down in late April 2020?

Answer
user profile image
1 month ago


As of 07 August, nearly 110 days after they shut down six of their schemes due to poor portfolio quality, the fund has managed to collect a total of Rs.4280 crore from maturities, pre-payments and coupon payments. That is not even 20% of the AUM of these funds that were shut down as of April last week. Clearly, the fund is not doing enough.

It may be recollected that Franklin Templeton had shut down six of its debt fund schemes on April 23, due to redemption pressure and lack of liquidity in the bond market. The fund had then stated that redemption pressures were mounting from corporates and they did not have liquidity in the markets, nor in their books.

Most of them were bond funds or medium duration funds with a high degree of credit risk. Since these funds had huge borrowings, the first priority would be to repay the borrowings and only after that the customer payouts will commence. They are expecting that with the RIL deal, some of the bonds of the Future group would get repaid and liquidity would come in.

For now the unit holders of Franklin Templeton are stuck with nearly Rs.25,000 crore of corporate funds locked in. It is estimated that even in a best case scenario, the recovery in these funds may not even touch 40%, which means these unit holders will have to be prepared for writing down nearly Rs.15,000 crore from their investment accounts.