TORONTO, May 26, 2015 /CNW/ - Franklin Templeton Investments Corp. today introduced its first multi-manager, liquid alternative strategy in Canada. Franklin K2 Alternative Strategies Fund provides institutional investors access to a diversified portfolio of alternative investment strategies managed by institutional hedge fund managers, which seeks to provide investors with lower correlations to traditional asset classes, reduced portfolio volatility and attractive risk-adjusted returns, while offering daily liquidity.
"In today's volatile, low interest rate environment, Canadian institutional plans are looking for investment options that can help reduce volatility in unpredictable markets, while providing attractive risk-adjusted returns," said Dan Elsberry, head of Alternatives, North America Advisory Services, Franklin Templeton Investments. "Franklin K2 Alternative Strategies Fund can be a compelling investment option for such investors, as well as those who are looking to complement their equity and fixed income holdings with a diversified, multi-manager approach that has lower correlations to traditional asset classes."
Franklin K2 Alternative Strategies Fund, which is only available to institutional investors on a prospectus exempt basis, seeks to provide access to alternative sources of capital appreciation, using the proven investment and advanced risk management process K2 Advisors has employed on behalf of its clients worldwide for 20 years.
"As market conditions remain uncertain, many of our institutional clients are seeking an alternative strategy that adds diversification and reduces risk," said Duane Green, head of Franklin Templeton Institutional – Canada. "Building on the success of similar K2 products in the US and Europe, Franklin K2 Alternative Strategies Fund provides a unique approach among hedge fund structures available in Canada, including offering a reduced flat fee relative to traditional hedge fund pricing structures, daily liquidity and sub-advisor transparency."
The new fund invests substantially all of its assets in the underlying FTIF Franklin K2 Alternative Strategies Fund*, which is managed by portfolio managers David Saunders, founding managing director, Brooks Ritchey, senior managing director and head of portfolio construction, and Rob Christian, senior managing director and head of research, at K2 Advisors in Stamford, Connecticut. These portfolio managers dynamically allocate FTIF Franklin K2 Alternative Strategies Fund's assets across multiple managers and alternative strategies, including event driven, global macro, long short equity and relative valuei.
Each investment sub-advisor manages a strategy for FTIF Franklin K2 Alternative Strategies Fund, investing across a wide range of securities, which may include but are not limited to, equity and equity-related securities, debt securities, financial derivative instruments and exchange-traded notes.
Franklin K2 Alternative Strategies Fund provides investors access to a group of unaffiliated, top-tier hedge fund managers with strong track records of delivering attractive risk-adjusted returns over multiple market cycles. With the goal of providing capital appreciation and lower volatility relative to the broad equity markets, K2 adjusts strategy allocations to reflect their top-down market views as they evolve.
FTIF Franklin K2 Alternative Strategies Fund is invested across multiple sub-advisors, under the following four alternative strategies:
Long short equity:
Chilton Investment Company, LLC
Impala Asset Management, LLC
Jennison Associates, LLC
Wellington Management Company, LLP
P. Schoenfeld Asset Management, L.P.
Basso Capital Management, L.P.
Chatham Asset Management, LLC
Lazard Asset Management, LLC
Loomis, Sayles & Company, L.P.
EMSO Partners Limited
Graham Capital Management, L.P.
The underlying fund combines K2 Advisors' alternative solutions expertise with Franklin Templeton's global resources in risk management, compliance and distribution.
About Franklin Templeton Institutional
Franklin Templeton Institutional, part of Franklin Templeton Investments Corp., provides clients with global and domestic investment capabilities across a diverse range of asset classes and styles. Each manager's specialized expertise, combined with Franklin Templeton's global institutional platform, balanced portfolio services and risk management capabilities, provides clients with investment strategies that can be tailored to meet their unique objectives. For more information, please visit www.ftinstitutional.ca.
About K2 Advisors
K2 Advisors provides integrated hedge fund product solutions covering multiple strategies to sophisticated institutional and high-net-worth investors worldwide. K2's investment philosophy is centred on a steadfast commitment to the prudent allocation of client capital – with an emphasis on rigorous and sophisticated risk management programs – while seeking to generate steady asymmetric returns (in short, attempting to maximize participation in positive markets while seeking to protect in down markets through fewer and less negative returns). K2 allocates to hedge fund strategies that exhibit lower volatility and correlation to the broad capital markets to achieve its investment objectives.
The Stamford, Connecticut-based company has a global presence with 115 employees and offices in New York, London, Tokyo, Hong Kong and Sydney. For more information, please visit www.k2advisors.com.
On November 1, 2012, K2 became part of Franklin Templeton Investments through the acquisition of a majority interest in K2's parent company, K2 Advisors Holdings, LLC.
About Franklin Templeton Investments
Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management to retail, institutional and sovereign wealth clients in over 150 countries. Through specialized teams, the company has expertise across all asset classes—including equity, fixed income, alternative and custom solutions. The company's more than 600 investment professionals are supported by its integrated, worldwide team of risk management professionals and global trading desk network. With offices in 35 countries, the California–based company has more than 65 years of investment experience and over US$894 billion (over C$1,079 billion) in assets under management as of April 30, 2015.
i FTIF Franklin K2 Alternative Strategies Fund's underlying investment strategies include, but are not limited to the following:
- Long Short Equity Strategies – Long short equity strategies generally seek to produce returns from investments in the global equity markets by making long and short investments in common stocks and common stock indices. These strategies are generally focused on risk-adjusted returns and capitalize on the sub-advisor's views and outlooks for specific equity markets, regions, sectors and securities. Examples of long/short equity strategies include: (i) growth-focused strategies; (ii) value-focused strategies; (iii) market-neutral strategies (e.g. maintaining net exposures between 20 per cent short and 20 per cent long); (iv) sector-focused strategies (e.g. technology, healthcare and financials); and (iv) regionally focused strategies (e.g. Europe and Asia).
- Relative Value Strategies – Relative value strategies encompass a wide range of investment techniques that are intended to profit from pricing inefficiencies in related securities. These strategies generally involve taking a position in one financial instrument and simultaneously taking an offsetting position in a related instrument in an attempt to profit from incremental changes in the price differential. Examples of relative value strategies are: (a) credit long short strategies; (b) credit arbitrage; (c) convertible arbitrage; and (d) volatility arbitrage.
- Event Driven Strategies – Event driven strategies invest in securities of companies undergoing corporate events. These strategies are generally focused on analyzing the impact of the company-specific or transaction-specific event on security valuations. Examples of such events include mergers, acquisitions, transfers of assets, tender offers, exchange offers, recapitalizations, liquidations, divestitures, spin-offs, equity restructurings and reorganizations.
- Global Macro Strategies – Global macro strategies generally focus on macroeconomic opportunities across numerous markets and instruments. Investments may be long or short and based on either relative value or directional views of a market, a currency, an interest rate, a commodity or any macroeconomic variable. Examples of global macro strategies include discretionary and systematic macroeconomic strategies.
*The underlying fund
The underlying fund is a sub-fund of Franklin Templeton Investment Funds ("FTIF") and is managed by an affiliate of Franklin Templeton Investments Corp. (FTIC) and organized under the laws of Luxembourg as a Société d'Investissement à Capital Variable, an open-end investment company. The underlying fund qualifies as a UCITS, an undertaking for collective investment in transferable securities, and is distributed under a prospectus in several European and other countries. FTIF Franklin K2 Alternative Strategies Fund is not available directly to investors in Canada. K2 Advisors is the portfolio advisor to the underlying fund and is a majority owned subsidiary of Franklin and an affiliate of FTIC.
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