Industry Updates

Franklin Templeton completes acquisition of majority stake in K2

Thursday, November 01, 2012

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Opalesque Industry Update - Franklin Resources, Inc., which operates as Franklin Templeton Investments, has announced that it has completed the acquisition of a majority stake in K2 Advisors Holdings LLC (operating through its subsidiaries, “K2”), an independent fund of hedge funds manager, enhancing Franklin Templeton’s alternative investments and multi-asset solutions platforms.

The proceeds of this transaction by Franklin Templeton will be used by K2 to purchase all of the equity currently held by TA Associates and to retire all of K2’s debt obligations. The current management of K2 has not sold any of its interests and has not received any up-front consideration in this transaction. Franklin Templeton will acquire the remainder of K2 over a multi-year period.

William Yun, CFA, executive vice president, Franklin Templeton Alternative Strategies, said, “The continued development of our alternatives platform has been a core strategic initiative for Franklin Templeton, and to that end, we’ve focused on creating new investment strategies and broadening our distribution capabilities across multiple channels. K2 is an important addition to those capabilities, particularly as institutional investors continue to shift allocations towards the hedge fund and fund of hedge funds space and to look for multi-asset solutions providers.”

K2, co-founded in 1994 by William A. Douglass III and David C. Saunders, is a fund of hedge funds solutions provider with strong risk management, manager selection and asset allocation capabilities. The group has a proven multi-team investment process and manager evaluation expertise that has resulted in over 18 years of strong growth and performance that ranks among the leaders in the industry. Douglass and Saunders, K2’s founding managing directors, have entered into long-term employment arrangements in connection with the transaction and will continue to manage the business. No changes are planned for the K2 investment management processes.

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