Franklin Resources to buy controlling stake in K2
SAN MATEO, Calif. (AP) — Investment manager Franklin Resources Inc. said Wednesday that it is buying a controlling interest in independent fund-of-hedge-funds manager K2 Advisors Holdings LLC.
Financial terms of the deal were not disclosed. A fund of hedge funds allows investors to have stakes in several hedge funds, allowing them to diversify their holdings and spread out risks.
Franklin, which operates as Franklin Templeton Investments, said that the transaction will enhance its alternative investments.
K2 will use the proceeds of the deal to buy all of the equity held by TA Associates and to retire K2's debt.
Management at K2 will not sell any portion of its stake in the company at this time, K2 said. They also won't receive up-front consideration in the transaction.
Starting in 2016, Franklin Templeton will acquire the remaining interest in K2 over several years, the company said.
The deal is expected to close in the fourth quarter.
K2 had roughly $9.3 billion in assets under management as of the end of August.
Shares of Franklin Resources ended the regular trading session up 87 cents at $126.20.