Franklin Templeton buys stake in hedge fund boutique

Franklin Templeton has strengthened its alternative investment and multi-asset units following its purchase of a majority stake in a fund of hedge funds boutique.

The firm has signed an agreement with K2 Advisor Holdings to become majority shareholders in the US boutique with a view to acquire the remainder of the firm from 2016.

K2 Advisor Holdings invests exclusively in hedge fund funds and runs €7.1 billion in assets. It was founded in 1994 and operates along a conservative, risk-based philosophy using advanced risk management.

The Boston-based private equity group TA Associates sold its stake in K2 Advisor Holdings as part of the deal to allow Franklin Templeton, currently with €565 billion in assets, a clear path for its full ownership plan.

'One of the ways that we have built Franklin Templeton’s global business is by making strategic investments in smaller, highly experienced asset management companies whose expertise complements Franklin Templeton’s global offerings and meets our world-class standards,' said Greg Johnson, CEO of Franklin Templeton Investments.

'This new relationship with K2 is an important step in our overall plan to expand Franklin Templeton’s alternative strategies and solutions platform.'

The move follows a number of similar deals in the hedge fund of funds industry which have seen Kohlberg Kravis Roberts buy the fund of funds manager Prisma Capital Partners and Man Group acquire FRM Holdings.