Franklin Templeton Investments has launched it first multi-manager, liquid alternative strategy in Canada, the Franklin K2 Alternative Strategies Fund, providing institutional investors with access to a portfolio of alternative investment strategies managed by institutional hedge fund managers.
"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," says 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," says 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 value.
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
Event driven:
P Schoenfeld Asset Management, LP.
Relative value:
Basso Capital Management, LP.
Chatham Asset Management, LLC
Lazard Asset Management, LLC
Loomis, Sayles & Company, LP.
Global macro:
EMSO Partners Limited
Graham Capital Management, LP.
The underlying fund combines K2 Advisors' alternative solutions expertise with Franklin Templeton's global resources in risk management, compliance and distribution.
