Franklin Templeton unveils new K2 UCITS emerging markets strategy on liquid alternative hedge fund platform

Emerging markets

Franklin Templeton is rolling out a new emerging markets-focused hedge fund strategy on its FTAF liquid fund platform, and aims to tap into sovereign and corporate debt opportunities with a “global macro style” of alpha generation.

The Franklin K2 Emso Emerging Markets UCITS strategy, a sub-fund of the firm’s Franklin Templeton Alternatives Funds (FTAF) range that launched last year, will trade an assortment of EM sovereign and corporate debt securities and currencies, including derivatives, long and short.

The new Emso fund replicates the investment strategy currently housed within Franklin Templeton’s UCITS compliant multi-strategy vehicle, the Franklin K2 Alternative Strategies Fund, and will be managed by the same team – Emso’s CIO Mark Franklin, and John Hynes, senior portfolio manager.

Since becoming a co-manager in April 2015, the strategy has generated an annualised return of 5.4 per cent, with a standard deviation of 4.5 per cent.

The FTAF offering was launched in October 2019 offering European investors access to various liquid hedge fund strategies run by K2 Advisors, which has pioneered low-fee liquid hedge fund models, through its Managed Account Platform. 

The new emerging markets-focused Emso fund joins five managers – spanning across long/short equity, relative value, and event driven strategies – currently run on the FTAF platform.

The FTAF strategies are managed in a UCITS compliant format offering daily liquidity and transparency.

Commenting on the launch, Julian Ide, head of EMEA distribution at Franklin Templeton, said the firm is now one of the biggest providers of alternative solutions globally with USD124 billion in assets under management, adding the new launch “offers a differentiated global macro style of alpha generation and provides further robust diversification to client portfolios.”

Bill Santos, senior managing director, K2 Advisors, said the manager’s flexible mandate allows the team to invest across a large universe where they see value, adding the firm aims to further build out the FTAF range with differentiated strategies from its Managed Accounts Platform.

Stamford, Connecticut-headquartered K2 Advisors provides a range of hedge fund and alternative product solutions - including single investor custom-tailored investment programs, commingled funds of hedge funds, and strategic advisory structures - across multiple strategies to institutional and high net worth investors, as well as liquid alternative fund offerings for retail investors globally. It has more than USD10 billion in assets under management.