U.S. fund manager Franklin Templeton expects its Asian assets to grow by more than 60 percent to $50 billion in five years, driven by growth in South Korea, Taiwan and India, a senior executive said on Wednesday.

Mark Browning, managing director of Franklin Templeton`s Asian business, said Asian retail and institutional investors are increasingly investing in securities outside their home markets.

Franklin Templeton, part of Franklin Resources Inc., the largest publicly traded U.S. asset manager, has total assets of $600 billion. Asia currently accounts for about 5 percent, according to Singapore-based Browning, but that is expected to rise as the firm expands its global footprint.

"The growth in assets here always surprises us to the upside," Browning said. "The reason is a growing appetite among both institutions and the public for investing internationally."

Franklin Templeton`s Asian assets have grown about 30 percent since October to $31 billion, he said, almost hitting the firm`s full-year target in the first eight months of its financial year.

"For this financial year we actually hit our target for 2007, which was a substantial increase over 2006," he said.

The firm currently manages about $14 billion in assets in Taiwan, $6 billion in both India and South Korea, over $2 billion in Hong Kong, $1.2 billion in Singapore and $3 billion in Australia. It has also set up a joint venture in mainland China -- Franklin Templeton Sealand Fund Management Co.

Emerging markets guru Mark Mobius also manages Templeton Emerging Markets, part of Franklin Templeton, from Singapore.

The firm`s major competitors in Asia include the fund management arm of Dutch ING Groep NV, U.S. money manager Blackrock Inc., UBS and Schroders.

Browning said the firm was unlikely to expand its business through acquisitions, as it had looked at several potential targets in the region and considered them too expensive.

CENTRAL BANK INVESTING OVERSEAS

While 85 percent of Franklin Templeton`s assets in Asia were raised from retail investors, Browning predicted that would change in coming years as central banks and institutions turn to global fund managers to invest in stocks and bonds abroad.

"In a market like Korea there`s a growing focus for investing internationally and, frankly, that`s where a group like Franklin Templeton has an advantage over domestic players," he said.

Browning said assets raised from South Korea have grown to $6 billion from $4.2 billion in October, and may rise to $10 billion in the next 3-5 years.

Retail demand in Asia is expected to remain strong because investors still have limited investments in mutual funds, he said. For example, in India, investors put only 4 percent of their savings in mutual funds, while in Korea, they invest less than 10 percent.

"I don`t know when we will reach the U.S. model of 50 percent of Americans investing in mutual funds," he said.

Browning also said the firm may start a domestic asset management business in Australia that would invest in local equities. Currently it only sells offshore funds in Australia.

"At some time over the next 12-18 months we will be making a decision on how we are growing in Australia and whether we need to build a domestic asset management presence," he said, noting the global boom in commodities has been a big plus for Australian equities and real estate markets.

But he said that with retirement funds of around $900 billion in Australia, institutional and retail investors will increasingly have to look at investment opportunities abroad.

Browning said the firm is also looking at Malaysia`s asset management market. He said Malaysia`s profile has risen among international investors because of its steps to liberalise currency trading.