Franklin Resources, the parent of Franklin Templeton Investments, has agreed to acquire a majority stake in K2 Advisors Holdings, a fund of hedge funds manager, from private equity shop TA Associates.
Terms of the deal were not disclosed. According to Franklin, the current management of K2 will not sell any of its interests and will receive no up-front consideration in the deal. Beginning in 2016, Franklin will acquire the remainder of K2 over a multi-year period.
K2 was co-founded in 1994 by William Douglass and David Saunders, who will continue to manage the business. The firm has a global presence with 115 employees in the U.S., U.K., Japan, Australia and Hong Kong, and approximately US$9.3 billion in assets under management as of August 31.
"This new relationship with K2 is an important step in our overall plan to expand Franklin Templeton's alternative strategies and solutions platform," stated Greg Johnson, chief executive of Franklin Templeton.
Saunders added his firm was attracted to Franklin's established global presence and its extensive resources in distribution, operations and technology.
Roger Kafker, managing director, TA Associates, said that since acquiring an interest in K2 in March 2007, the firm has grown from US$5 billion to US$9 billion “while generating strong returns for its investors in challenging markets.”