Franklin Resources Buys Majority Stake in K2

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By Trey Thoelcke Published
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Mutual fund giant Franklin Resources (NYSE: BEN) has announced that it will acquire a majority stake in K2 Advisors for an undisclosed amount. K2 is one of the largest of the so-called funds of hedge funds. The deal is expected to close at the end of the year, pending regulatory approval.

K2, which manages about $9.3 billion in assets, will use the proceeds to buy back its stake held by TA Associates and to retire its debt obligations. Franklin oversees approximately $731 billion in assets, and in this deal gains the right to start buying the rest of K2 beginning in 2016. The deal also allows it to offer its wealthy investors more access to some popular hedge funds.

“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.”

The past few years have been tough for funds of hedge funds, with investors pushing back against hedge funds fees in light of hedge funds’ questionable returns of late. More buyouts by companies eager to move into the space are likely, as are closures of endangered firms that fail to strike a deal.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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