Franklin Templeton and K2 Advisors have launched their first multi-manager, multi-strategy mutual fund focused on alternative investment strategies, called the Franklin K2 Alternative Strategies Fund. The fund combines K2’s extensive experience and proven track record of successful alternative investing for institutional investors around the world with Franklin Resources, Inc. (NYSE:BEN)’s global resources. Building upon K2 and Franklin Templeton’s recent partnership, the result of Franklin Templeton acquiring a majority stake in K2 last fall, the fund gives retail investors access to alternative investment strategies managed by institutional-quality hedge fund managers, allowing them to achieve greater portfolio diversification and enhance their risk-adjusted returns over multiple market cycles while simultaneously having low volatility, daily liquidity and daily pricing. Through the fund, investors will have access to a group of unaffiliated, institutional-quality hedge fund managers, including:
• Basso Capital Management, L.P.
The ExodusPoint Partners International Fund returned 0.36% for May, bringing its year-to-date return to 3.31% in a year that's been particularly challenging for most hedge funds, pushing many into the red. Macroeconomic factors continued to weigh on the market, resulting in significant intra-month volatility for May, although risk assets generally ended the month flat. Macro Read More
• Chatham Asset Management, LLC
• Chilton Investment Company, Inc.
• Impala Asset Management LLC
• Jennison Associates LLC
• Lazard Asset Management LLC
• Loomis Sayles & Company, L.P.
• P. Schoenfeld Asset Management LLC
• York Capital Management L.P.
Franklin Templeton and K2 press release below
San Mateo, CA, November 18, 2013 — Franklin Templeton Investments today announced the launch of its first multi-manager, multi-strategy mutual fund focused on alternative investment strategies, Franklin K2 Alternative Strategies Fund (“the Fund”) (NASDAQ: FAAAX). Building upon Franklin Templeton’s strategic acquisition of hedge fund solutions provider K2 Advisors in 2012, this US-registered Fund provides access to a diversified portfolio of alternative investment strategies managed by institutional-quality hedge fund managers. The Fund seeks to provide investors with lower correlations to traditional asset classes, reduced portfolio volatility and attractive risk-adjusted returns, while offering daily liquidity.
As the Fund’s investment manager, K2 Advisors will dynamically allocate assets across multiple managers and alternative strategies, including event driven, global macro, long short equity and relative value[i]. K2 Advisors will continually adjust the allocations to these strategies to reflect the team’s top-down market views with the goal of providing capital appreciation and lower volatility relative to the broad equity markets.
“In today’s volatile, low interest rate environment, many investors are looking for actively managed investment solutions from established managers employing strategies that can help reduce volatility in unpredictable markets while providing attractive risk adjusted returns,” said David C. Saunders, co-lead portfolio manager of Franklin K2 Alternative Strategies Fund and cofounding managing director of K2 Advisors. “We believe this Fund is an ideal solution to meet those needs, and are thrilled to offer retail investors access to several of the strategies and managers that K2’s institutional investors have long had access to.”
“The Fund seeks to provide access to alternative sources of capital appreciation, using the same investment and risk management process K2 Advisors has employed on behalf of its institutional clients worldwide for nearly 20 years,” said William A. Douglass III, the Fund’s co-lead portfolio manager and cofounding and managing director of K2 Advisors. “For investors looking to complement their fixed income and equity holdings through a diversified, multi-manager approach with lower correlations to traditional asset classes, we believe this Fund can be an important tool in their arsenal.”
William Yun, CFA1, executive vice president, Franklin Templeton Alternative Strategies added, “K2 Advisors has a history of integrating a conservative, risk-based philosophy and advanced risk management systems into its hedge fund investment strategies. In developing the Franklin K2 Alternative Strategies Fund, Franklin Templeton has built on that expertise, bringing to bear the company’s full global resources in risk management, compliance, distribution, technology and operations to create a compelling offering for investors that addresses today’s uncertain market conditions.”
Franklin K2 Alternative Strategies Fund gives investors access to a group of unaffiliated, institutional-quality hedge fund managers with strong track records of delivering superior risk-adjusted returns over multiple market cycles. The Fund’s initial set of sub-advisors[ii] includes:
- Basso Capital Management, L.P.
- Chatham Asset Management, LLC
- Chilton Investment Company, Inc.
- Impala Asset Management LLC
- Jennison Associates LLC
- Lazard Asset Management LLC
- Loomis Sayles & Company, L.P.
- P. Schoenfeld Asset Management LLC
- York Capital Management L.P.
High-net-worth individuals and certain institutional investors may also be interested in the Fund for a variety of reasons, including its daily liquidity in comparison to traditional hedge funds and more efficient (e.g. 1099) tax reporting due to its tax status as a regulated investment company.
About K2 Advisors
K2 Advisors provides integrated hedge fund product solutions covering multiple strategies to sophisticated institutional and high-net-worth investors worldwide. Since its inception, K2 as an enterprise has focused solely on the business of hedge fund investing. From a small organization with less than US$10 million in assets under management in 1994, the firm has steadily grown into one of the largest hedge fund investment advisory firms in the world.
The firm’s investment philosophy is centered on a steadfast commitment to the prudent allocation of client capital – with an emphasis on rigorous and sophisticated risk management programs – while seeking to generate steady asymmetric returns (in short, maximizing participation in positive markets while seeking to protect in down marketsthrough fewer and less negative returns). K2 allocates to hedge fund strategies that exhibit lower volatility and correlation to the broad capital markets to achieve its investment objectives. Products offered include discretionary and non-discretionary custom-tailored investment programs, commingled funds of hedge funds, and hedge fund investment advisory services.
The Stamford, CT-based company has a global presence with 115 employees and offices in New York, London, Tokyo, Hong Kong and Sydney. For more information, please visit www.k2advisors.com.
On November 1, 2012, K2 became part of Franklin Templeton Investments through the acquisition of a majority interest in K2’s parent company, K2 Advisors Holdings, L.L.C.
About Franklin Templeton Alternative Investments and Solutions
Franklin Templeton’s alternative investment and solutions offerings include the:
- · Global asset allocation and solutions capabilities of Franklin Templeton Multi-Asset Strategies;
- · Integrated hedge fund product solutions of K2 Advisors;
- · Commodities and managed futures strategies of alternative investments specialist Pelagos Capital Management;
- · Emerging markets private equity and capabilities of Darby Private Equity and Templeton Emerging Markets Group;
- · Global property and real asset offerings of Franklin Templeton Real Asset Advisors; and
- · Selected global macro strategies of Franklin Templeton Fixed Income Group.
About Franklin Templeton Investments
The Fund’s principal underwriter is Franklin Templeton Distributors, Inc., a wholly owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Bissett, Fiduciary Trust, Darby, Balanced Equity Management and K2 investment teams. The San Mateo, CA-based company has more than 65 years of investment experience and over $868 billion in assets under management as of October 31, 2013. For more information, please call 1-800/DIAL BEN® or visit franklintempleton.com.
Note to Editors: Franklin K2 Alternative Strategies Fund
All investments involve risks, including possible loss of principal. The market values of securities owned by Franklin K2 Alternative Strategies Fund will go up or down, sometimes rapidly or unpredictably. The Fund’s performance depends on the manager’s skill in selecting, overseeing, and allocating Fund assets. The Fund is actively managed and could experience losses if the Investment Manager’s and Sub-Advisors’ judgment about particular investments made for the Fund’s portfolio prove to be incorrect. Some Sub-Advisors may have little or no experience managing registered investment companies. Foreign investments are subject to greater investment risk such as political, economic, credit and information risks as well as risk of currency fluctuations. Investments in derivatives involve costs and create economic leverage, which may result in significant volatility and cause the Fund to participate in losses that significantly exceed the Fund’s initial investment. Lower-rated or high yield debt securities involve greater credit risk, including the possibility of default or bankruptcy. The Fund may make short sales of securities, which involves the risk that losses may exceed the original amount invested. Merger arbitrage investments risk loss if a proposed reorganization in which the fund invests is renegotiated or terminated. Liquidity risk exists when securities have become more difficult to sell at the price they have been valued. The Fund may invest in investment funds, which may be more costly than investing in the underlying securities directly. Please see the prospectus and summary prospectus for information on these as well as other risk considerations.
Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN /(800)342-5236 or visit franklintempleton.com. Please carefully read a prospectus before you invest or send money.
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