CIPs consist of mutual and other investment funds, limited partnerships and similar structures and CLOs, all of which are sponsored by the Company, and include both voting interest entities and variable interest entities (“VIEs”). The Company had 64 CIPs, including 13 CLOs, as of March 31, 2022 and 60 CIPs, including 10 CLOs, as of September 30, 2021.


(in millions)	March 31, 2022		September 30, 2021
Assets
Cash and cash equivalents	$	603.1	$	289.4
Receivables	130.6		127.8
Investments, at fair value	7,134.6		5,820.1
Total Assets	$	7,868.3	$	6,237.3

Liabilities
Accounts payable and accrued expenses	$	654.3	$	558.0
Debt	5,100.1		3,671.0
Other liabilities	19.7		13.8
Total liabilities	5,774.1		4,242.8
Redeemable Noncontrolling Interests	625.3		622.5
Stockholders’ Equity
Franklin Resources, Inc.’s interests	1,017.4		1,000.7
Nonredeemable noncontrolling interests	451.5		371.3
Total stockholders’ equity	1,468.9		1,372.0
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity	$	7,868.3	$	6,237.3

The CIPs did not have a significant impact on net income attributable to the Company during the three and six months ended March 31, 2022 and 2021.

The Company has no right to the CIPs’ assets, other than its direct equity investments in them and investment management and other fees earned from them. The debt holders of the CIPs have no recourse to the Company’s assets beyond the level of its direct investment, therefore the Company bears no other risks associated with the CIPs’ liabilities.


(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of March 31, 2022
Assets
Cash and cash equivalents of CLOs	$	438.3	$	—	$	—	$	—	$	438.3
Receivables of CLOs	—		58.8		—		—		58.8
Investments
Equity and debt securities	164.0		699.1		595.4		246.0		1,704.5
Loans	—		5,221.1		33.6		—		5,254.7
Real estate	—		—		175.4		—		175.4
Total Assets Measured at Fair Value	$	602.3	$	5,979.0	$	804.4	$	246.0	$	7,631.7


(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of September 30, 2021
Assets
Cash and cash equivalents of CLOs	$	145.4	$	—	$	—	$	—	$	145.4
Receivables of CLOs	—		84.0		—		—		84.0
Investments
Equity and debt securities	310.8		647.3		453.3		343.5		1,754.9
Loans	—		3,955.3		20.5		—		3,975.8
Real estate	—		—		89.4		—		89.4
Total Assets Measured at Fair Value	$	456.2	$	4,686.6	$	563.2	$	343.5	$	6,049.5

Investments for which fair value was estimated using reported NAV as a practical expedient consist of a redeemable global hedge fund, a redeemable U.S. equity fund and nonredeemable private equity funds. These investments were as follows:


(in millions)	March 31, 2022		September 30, 2021
Nonredeemable investments1
Investments with known liquidation periods	$	46.0	$	141.4
Investments with unknown liquidation periods	12.0		—

Redeemable investments2	188.0		202.1

Unfunded commitments3	0.5		0.5

1The investments are expected to be returned through distributions over the life of the funds as a result of liquidations of the funds’ underlying assets. Investments with known liquidation periods have an expected weighted-average life of 0.8 year at March 31, 2022 and 1.3 years at September 30, 2021.

3Of the total unfunded commitments, the Company was contractually obligated to fund $0.2 million based on its ownership percentage in the CIPs, at March 31, 2022 and September 30, 2021.


(in millions)	Equity and Debt Securities		Real Estate		Loans		Total Level 3 Assets
for the three months ended March 31, 2022
Balance at January 1, 2022	$	539.0	$	98.9	$	34.2	$	672.1
Realized and unrealized gains (losses) included in investment and other income of consolidated investment products, net	78.0		5.7		(0.3)		83.4
Purchases	115.3		70.8		0.1		186.2
Sales and settlements	(81.9)		—		(0.4)		(82.3)
Deconsolidations	(55.0)		—		—		(55.0)
Balance at March 31, 2022	$	595.4	$	175.4	$	33.6	$	804.4
Change in unrealized gains (losses) included in net income relating to assets held at March 31, 2022	$	73.6	$	5.7	$	(0.3)	$	79.0


(in millions)	Equity and Debt Securities		Real Estate		Loans		Total Level 3 Assets
for the six months ended March 31, 2022
Balance at October 1, 2021	$	453.3	$	89.4	$	20.5	$	563.2
Realized and unrealized gains (losses) included in investment and other income of consolidated investment products, net	170.3		14.3		—		184.6
Purchases	133.5		71.7		14.1		219.3
Sales and settlements	(105.8)		—		(1.0)		(106.8)
Deconsolidations	(55.0)		—		—		(55.0)
Transfers into Level 3	0.1		—		—		0.1
Transfers out of Level 3	(1.0)		—		—		(1.0)
Balance at March 31, 2022	$	595.4	$	175.4	$	33.6	$	804.4
Change in unrealized gains included in net income relating to assets held at March 31, 2022	$	166.1	$	14.3	$	—	$	180.4


(in millions)	Equity and Debt Securities		Real Estate		Loans		Total Level 3 Assets
for the three months ended March 31, 2021
Balance at January 1, 2021	$	356.0	$	407.8	$	23.5	$	787.3
Realized and unrealized gains included in investment and other income of consolidated investment products, net	1.0		1.2		—		2.2
Purchases	7.5		21.2		—		28.7
Sales and settlements	(56.0)		—		(1.1)		(57.1)
Deconsolidations	(36.2)		—		—		(36.2)
Transfers into Level 3	1.2		—		—		1.2
Foreign exchange revaluation	(2.3)		(6.7)		—		(9.0)
Balance at March 31, 2021	$	271.2	$	423.5	$	22.4	$	717.1
Change in unrealized gains (losses) included in net income relating to assets held at March 31, 2021	$	1.2	$	1.2	$	(0.1)	$	2.3


(in millions)	Equity and Debt Securities		Real Estate		Loans		Total Level 3 Assets
for the six months ended March 31, 2021
Balance at October 1, 2020	$	322.3	$	339.2	$	24.9	$	686.4
Realized and unrealized gains included in investment and other income of consolidated investment products, net	20.1		2.7		—		22.8
Purchases	20.1		72.3		—		92.4
Sales and settlements	(57.0)		—		(2.5)		(59.5)
Deconsolidations	(36.2)		—		—		(36.2)
Transfers into Level 3	1.2		—		—		1.2
Foreign exchange revaluation	0.7		9.3		—		10.0
Balance at March 31, 2021	$	271.2	$	423.5	$	22.4	$	717.1
Change in unrealized gains included in net income relating to assets held at March 31, 2021	$	19.7	$	2.7	$	0.1	$	22.5

(in millions)

as of March 31, 2022

Fair Value

Valuation Technique

Significant Unobservable Inputs

Range (Weighted Average1)

Equity and debt securities

529.3

Market pricing

Private sale pricing

$0.39–$1,704.16 ($132.63) per share

66.1

Market comparable companies

Enterprise value/
EBITDA multiple

14.7

Discount for lack of marketability

25.0%

Price-to-book value ratio

1.2

Real estate

175.4

Discounted cash flow

Discount rate

5.5%–6.3% (6.0%)

Exit capitalization rate

4.5%–5.5% (4.9%)

(in millions)

as of September 30, 2021

Fair Value

Valuation Technique

Significant Unobservable Inputs

Range (Weighted Average1)

Equity and debt securities

301.1

Market pricing

Private sale pricing

$0.39-$100.00 ($19.34) per share

102.3

Market comparable companies

Enterprise value/
EBITDA multiple

6.0–20.6 (13.7)

Discount for lack of marketability

6.0%–25.5% (17.6%)

Enterprise value/
Revenue multiple

0.6–7.2 (5.1)

Price-to-book value ratio

0.7–1.8 (1.4)

Control premium

20%

Price-to-earnings ratio

28.8

49.9

Discounted cash flow

Discount rate

3.3%–6.3% (4.3%)

Real estate

89.4

Discounted cash flow

Discount rate

5.8%–6.0% (5.9%)

Exit capitalization rate

5.0%–5.3% (5.1%)

If the relevant significant inputs used in the market-based valuations, other than discount for lack of marketability, were independently higher (lower) as of March 31, 2022, the resulting fair value of the assets would be higher (lower). If the relevant significant inputs used in the discounted cash flow valuations, as well as the discount for lack of marketability used in the market-based valuations, were independently higher (lower) as of March 31, 2022, the resulting fair value of the assets would be lower (higher).


(in millions)	Fair Value Level	March 31, 2022				September 30, 2021
		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial Asset
Cash and cash equivalents	1	$	164.8	$	164.8	$	144.0	$	144.0
Financial Liabilities
Debt of CLOs1	2 or 3	$	5,029.6	$	5,067.3	$	3,634.1	$	3,610.6
Other debt	3	70.5		66.1		36.9		36.6

__________________


	March 31, 2022			September 30, 2021
(in millions)	Amount		Weighted- Average Effective Interest Rate	Amount		Weighted- Average Effective Interest Rate
Debt of CLOs	$	5,029.6	1.86%	$	3,634.1	2.11%
Other debt	70.5		2.52%	36.9		1.95%
Total	$	5,100.1		$	3,671.0

The debt of CLOs had fixed and floating interest rates ranging from 0.88% to 7.30% at March 31, 2022, and from 1.00% to 8.22% at September 30, 2021. The other debt had fixed and floating interest rates ranging from 1.72% to 6.00% at March 31, 2022, and from 1.63% to 2.42% at September 30, 2021. The floating rates were primarily based on LIBOR.


(in millions)
for the fiscal years ending September 30,	Amount
2022 (remainder of year)	$	19.6
2023	—
2024	98.9
2025	—
2026	—
Thereafter	4,981.6
Total	$	5,100.1


(in millions)	March 31, 2022		September 30, 2021
Unpaid principal balance	$	5,235.2	$	3,951.1
Difference between unpaid principal balance and fair value	9.5		20.9
Fair Value	$	5,244.7	$	3,972.0

Investments 90 days or more past due were immaterial at March 31, 2022. There were no investments 90 days or more past due at September 30, 2021.