Franklin Resources is buying the remaining portion of Darby Overseas Investments that it does not already own. The San Mateo, California-headquartered fund firm already owned 87.34 percent of the Washington, DC-based investment manager. Franklin will pay $75.88 million in cash for the remaining 12.66 percent of the company. The deal is expected to close by the end of October.

Darby manages an estimated $1 billion in assets, including $700 million in private equity and mezzanine funds and $300 million in emerging markets fixed-income products. Darby CEO Richard H. Frank said that the firm plans to leverage its closer relationship to Franklin by opening new private equity and mezzanine funds in emerging markets.

"With their strong distribution capabilities and established presence in markets around the globe, they are uniquely positioned to support our objective of being the industry leader in emerging markets private equity and mezzanine finance," said Frank.

Franklin officials said that Darby will retain its distinct identity and that Nicholas F. Brady, former secretary of the US Treasury and former chairman and CEO of Dillon, Read & Co., will continue to head the firm. Frank will also stay as chief executive officer.

"Our union with Franklin Templeton Investments will enable us to more effectively channel resources to emerging markets companies with the best growth potential. This is a combination of two outstanding firms that will provide exceptional leadership in emerging markets finance," said Brady in a statement.

"We are very pleased to bring Darby Overseas Investments on board to expand our investment offerings in the alternative strategies arena and further meet the needs of our institutional and fiduciary individual clients," said Charles B. Johnson, chairman and chief executive officer of Franklin Resources, in a statement. "Darby's strong brand recognition and established track record in emerging markets private equity and mezzanine finance make it an excellent fit and solid strategic investment for our organization."  

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