Transactions


$9.3 billion AUM

has sold a majority interest to

has sold a majority interest to

from

from

Financial advisor to K2 Advisors

Financial advisor to K2 Advisors

November 2012

Freeman & Co. Acts as a Financial Advisor to K2 Advisors
Date
November 2012
Industry
Asset Management, Private Equity
Transaction
Sell-Side M&A

Franklin Templeton announces agreement to acquire majority stake in fund of hedge funds specialist K2 Advisors

September 19, 2012 (San Mateo, CA) – Franklin Resources, Inc. (NYSE: BEN), which operates as Franklin Templeton Investments, today announced that it has agreed to acquire a majority stake in K2 Advisors Holdings LLC (“K2”), a leading, independent fund of hedge funds manager.

This acquisition will enhance Franklin Templeton’s alternative investments and multi-asset solutions platforms. The proceeds of this acquisition 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 will not sell any of its interests at this time and will receive no up-front consideration in this transaction. Beginning in 2016, Franklin Templeton will acquire the remainder of K2 over a multi-year period. The transaction is subject to certain conditions including regulatory approval and is expected to close in the calendar fourth quarter of 2012.

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.

K2 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, 2012.

“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.”