Franklin Templeton is reorganizing its senior positions across the region. Michael Reed, until recently the man running Franklin Templeton Investment in Asia ex-Japan, has been transferred to Seoul. Vijay Advani, managing director in Singapore, is extending his remit to Hong Kong and Korea.

Reed already has Korea experience, having helped establish the firm there in 1997. “The Korea operation is the fourth largest market in the Franklin Templeton group,” he says, about on par with Taiwan with W2.5 trillion ($1.9 billion) of assets under management.

The firm has been searching for a local CEO, but realized more needs to be done to integrate Korea to the international operation. Reed says his 18-24 month stint in Seoul will allow him to train up the new CEO as his lieutenant, introduce him to the Franklin Templeton officials in the United States and elsewhere, and grow the business. The new CEO should be finalized in the next few weeks.

Mark Browning, country head for Singapore, has been promoted to regional head for Singapore and Hong Kong, responsible for sales and marketing. In addition, a country head for Hong Kong who will report to Browning has been appointed but not yet announced.

“With these management changes, all regional business relationships, marketing activities and new initiatives will be coordinated on a regional basis,” says Advani.

Outsiders suggest, however, that Reed’s move is the result of internal skirmishing. “Mike got in the middle of a shark fight,” says one observer.

“He has been banished to the snowy wastes of Korea,” a rival lyrically observes.

Executives at rival firms say Franklin Templeton’s regional hierarchy has been distorted. When Advani moved from India to Singapore, he got his own reporting line into Chuck Johnson, the San Mateo, California-based head of Franklin Templeton’s non-US business. The issue of Taiwan and China also remains clouded. Frank Liu runs the Taiwan office and also reports, not to Hong Kong or Singapore, but to California. Both Reed and Liu were separately trying to build business in mainland China, and it has yet to be seen whether this will fall under Advani or Liu’s responsibility.

Franklin Templeton officials say talk of turf wars is rubbish. Reed already has Korea experience, making him the perfect man to run a difficult but vital and growing business for the firm. Korea has been an important focus for Franklin Templeton for several years, and the firm was the first foreign asset management company to obtain a domestic license – joined so far only by Scudder Investments and Schroder Investment Management.

Hong Kong under Reed had a direct reporting line to Johnson, along with Tokyo and Australia and latterly Singapore. Now Hong Kong and Korea both report into Advani in Singapore. Advani also runs India, the Middle East and South Africa.

Rivals say poor performance may ultimately be driving the reorganization. Franklin Templeton is a value investor, and understandably has had a rough time amid Asia’s dot.com boom. Its fortunes have improved considerably in the past year, both in terms of performance and volume. But the overall record is not good, as consultants put the firm’s Asia ex-Japan equity performance in the bottom quartile for the past three years and in the third quartile for the past five years.

In the meantime, Franklin Templeton has also completed its acquisition of Fiduciary Trust of New York. Thomas Duffy, managing director for Asia at Fiduciary, says the two firms are complementary in Asia and won’t require lay-offs. Franklin Templeton is a value investor aimed at the retail market, while Fiduciary Trust’s focus is for institutional and private clients, and is a growth investor. Although Franklin Templeton does have a new institutional marketing capability in Hong Kong and Japan, Duffy says this will also remain intact, under its own name – for even there, the products don’t overlap. For example, Franklin Templeton has created an expertise in high-yield bonds that Fiduciary Trust lacks.