This acquisition will boost Franklin Templeton’s alternative investments and multi-asset solutions platforms, according to the asset management firm.
Pursuant to the terms of the agreement, the proceeds of this acquisition by Franklin Templeton will be used by K2 to purchase all of the equity currently held by TA Associates and to retire all of K2’s debt obligations.
The current management of K2 will not offload any of its interests at this time and will receive no up-front consideration in this transaction.
Beginning in 2016, Franklin Templeton will acquire the remainder of K2 over a multi-year period. The transaction is subject to certain closing conditions including regulatory approval and is expected to close in the fourth quarter of 2012.
Franklin Templeton Investments CEO Greg Johnson said one of the ways that the firm has 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.
"This new relationship with K2 is an important step in our overall plan to expand Franklin Templeton’s alternative strategies and solutions platform," Johnson added.
Established in 1994, K2 focuses its business solely on the fund of hedge funds business and operates through its offices located in New York City, London, Tokyo, Hong Kong and Sydney.
Morgan Stanley has served as financial advisor to Franklin Templeton, while Bank of America Merrill Lynch and Freeman & Co acted as financial advisors to K2.
