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Rating:Franklin Buys An Alt Firm's Other 80 Percent Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, June 17, 2013

Franklin Buys An Alt Firm's Other 80 Percent

Reported by Tommy Fernandez

Raising its flag in the alt investments space, Franklin Templeton [profile] has bought out the remaining 80 percent in Pelagos Capital Management to become a 100 percent equity stakeholder.

Franklin Templeton acquired its initial 20 percent equity stake in Pelagos in 2010.

In a statement, William Yun, executive vice president of Franklin Templeton Alternative Strategies, said that "we've developed a strong relationship with Pelagos since our initial investment in 2010 and after seeing growing interest from investors in alternative investment strategies, we are pleased to announce the completion of this acquisition."

Moreover, Yun stated that "the continued expansion of Franklin Templeton's alternatives and solutions platform has been a core strategic initiative for our business. The completion of the Pelagos acquisition represents an important step in our efforts to create new investment strategies and broaden our offerings across multiple distribution channels."

It is a sign of Franklin's continued appetite for alt properties. last September, the fund giant acquired hedger K2 Advsior Holdings.

According to Franklin, Pelagos is a Boston-based independent investment advisor founded in 2005 by Stephen Burke and John Pickart. The shop reportedly focuses on creating alternative investment solutions that seek to enhance overall returns and lower portfolio volatility.

Pelagos manages three distinct alternative investment capabilities including a commodity strategy, a managed futures strategy, and a hedge fund replication strategy. The shop team implements an investment process highlighted by a top-down approach to global macroeconomics, quantitative focused models based on fundamental analysis, disciplined multi-level risk controls, and institutional-quality implementation and transparency.

The firm's commodities and managed futures strategies are currently available as underlying investments within the Franklin Templeton Multi-Asset Real Return Fund, the Franklin Templeton Allocator Fund Series (Conservative, Moderate, Growth), and Franklin LifeSmart™ Retirement Target Funds, all of which are managed by Franklin Templeton Multi-Asset Strategies.

Here is the press release:
Company Press Release

Franklin Templeton Completes Purchase of Equity Stake in Alternatives Specialist Pelagos Capital



NEW YORK, NY -- Franklin Resources, Inc. (NYSE: BEN), which operates as Franklin Templeton Investments, today announced that it has acquired the remaining 80 percent stake of alternative investments specialist Pelagos Capital Management, LLC, to become a 100 percent equity stakeholder. Franklin Templeton acquired its initial 20 percent equity stake in Pelagos in 2010.

William Yun, CFA, executive vice president, Franklin Templeton Alternative Strategies, said, "We've developed a strong relationship with Pelagos since our initial investment in 2010 and after seeing growing interest from investors in alternative investment strategies, we are pleased to announce the completion of this acquisition."

Yun added, "The continued expansion of Franklin Templeton's alternatives and solutions platform has been a core strategic initiative for our business. The completion of the Pelagos acquisition represents an important step in our efforts to create new investment strategies and broaden our offerings across multiple distribution channels."

"Franklin Templeton's extensive global platform, product development expertise and established distribution network has helped bring Pelagos' investment strategies to investors worldwide," said Stephen Burke, CEO of Pelagos Capital. "We look forward to continue growing this relationship as a wholly-owned subsidiary."

Pelagos, an independent investment advisor founded in 2005 by Stephen Burke and John Pickart, is based in Boston, MA. Pelagos' mission is to create alternative investment solutions that seek to enhance overall returns and lower portfolio volatility. Pelagos manages three distinct alternative investment capabilities including a commodity strategy, a managed futures strategy, and a hedge fund replication strategy. The Pelagos team implements an investment process highlighted by a top-down approach to global macroeconomics, quantitative focused models based on fundamental analysis, disciplined multi-level risk controls, and institutional-quality implementation and transparency. Pelagos' commodities and managed futures strategies are currently available as underlying investments within the Franklin Templeton Multi-Asset Real Return Fund, the Franklin Templeton Allocator Fund Series (Conservative, Moderate, Growth), and Franklin LifeSmart™ Retirement Target Funds, all of which are managed by Franklin Templeton Multi-Asset Strategies.

Franklin Templeton Alternative Strategies oversees the company's specialized and alternative investment businesses globally. In addition to Pelagos, these businesses include:

• the multi-asset strategies and customized portfolios of Franklin Templeton Multi-Asset Strategies;
• the integrated hedge fund product solutions of K2 Advisors, in which Franklin Templeton holds a majority stake;
• the emerging markets private equity and mezzanine finance capabilities of Darby Private Equity;
• the global property and real asset offerings of Franklin Templeton Real Asset Advisors; and
• the company's asset management joint ventures in China and Vietnam.

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 US$846 billion in assets under management as of May 31, 2013. For more information, please call 1-800/DIAL BEN® or visit franklinresources.com.

All investments involve risks, including possible loss of principal. 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. Franklin Templeton Distributors, Inc., a wholly-owned subsidiary of Franklin Resources, Inc., is the principal underwriter of Franklin Templeton's U.S.-registered funds.
 

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