Franklin Resources, Inc

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Franklin Templeton Completes Purchase of Majority Stake in Fund of Hedge Funds Specialist K2 Advisors
Strategic Relationship Bolsters Company's Alternatives and Solutions Platform

Nov 01, 2012 (Marketwire via COMTEX) --Franklin Resources, Inc. (NYSE: BEN), which operates as Franklin Templeton Investments, today announced that it has completed the acquisition of a majority stake in K2 Advisors Holdings LLC (operating through its subsidiaries, "K2"), a leading, 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 world-class 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.

About K2 Advisors

K2 was established in 1994 and has focused its business exclusively on the fund of hedge funds business. The Stamford, CT-based company has a global presence with 115 employees and offices in New York, London, Tokyo, Hong Kong and Sydney. K2 has built organizational, systems and process competencies over 18 years to support investments in alternative and asymmetric return strategies. In 1994, the firm was launched with a single commingled fund of hedge funds product with six underlying hedge fund investments. Today, K2 oversees aggregated assets of approximately US$9.0 billion as of September 30, 2012, more than 65 percent of which is held in over 30 separate accounts or single investor entities that represent some form of strategic partnership with its clients. For more information, please visit www.k2advisors.com.

About Franklin Templeton Investments

Franklin Templeton Alternative Strategies group encompasses:

  • global asset allocation and solutions capabilities of Franklin Templeton Multi-Asset Strategies;
  • asset management joint ventures in Vietnam and China;
  • emerging market private equity, mezzanine finance and infrastructure capabilities of Darby Private Equity;
  • global REIT, private multi-manager real estate and real asset capabilities of Franklin Templeton Real Asset Advisors, and;
  • commodities, managed futures and hedge fund replication strategies of alternatives specialist Pelagos Capital Management, in which Franklin Templeton owns a 20 percent stake.

Morgan Stanley served as financial advisor to Franklin Templeton, and Bank of America Merrill Lynch and Freeman & Co. served as financial advisors to K2.

Franklin Templeton Alternative Strategies is a division 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, Fiduciary Trust, Darby and Bissett investment teams. The San Mateo, CA-based company has more than 60 years of investment experience and over US$749 billion in assets under management as of September 30, 2012. For more information, please visit www.franklinresources.com.

Copyright © 2012. Franklin Templeton Investments. All rights reserved.

Franklin Templeton Investments Corporate Communications: 
        New York
        Bill Weeks
        +1 917-370-9052 (cell)
        +1 212-632-3204 (office)
        Email Contact
        
        San Mateo
        Stacey Coleman
        +1 650-525-7458
        Email Contact
        
        K2 Advisors Holdings LLC:
        Sard Verbinnen & Company
        Jonathan Gasthalter
        +1 212-687-8080
        Email Contact
        
        Renee Soto
        +1 212-687-8080
        Email Contact