K2 Advisors became the latest fund of hedge funds to sell out to a much bigger rival, with a deal announced on Wednesday to sell a majority stake to Franklin Resources as investors' appetite for alternative assets continues to grow.Current management of K2, which has been flirting with potential suitors for more than a year, will receive no up-front payment under terms of the deal, Franklin Resources said in a statement.Franklin, which owns the world-renowned Templeton brand of international mutual funds and oversees $731 billion in assets, will be able to purchase the remainder of K2 starting in 2016. The proceeds from the deal will let K2, named for the Himalayan mountain and founded in 1994, buy back a stake currently owned by TA Associates.The deal comes at a time when fund of hedge funds have been under pressure following criticism they failed to provide proper due diligence when some firms invested with hedge fund managers who suffered heavy losses and then locked up investors' money during the financial crisis.
Franklin Resources, Inc. (Franklin) is a holding company. Shares of BEN traded higher by 0.69% or $0.87/share to $126.20. In the past year, the shares have traded as low as $87.71 and as high as $128.20. On average, 766716 shares of BEN exchange hands on a given day and today's volume is recorded at 550690.
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