As the demand for alternative investments continue to rise, investment analysts are continuing to see multi-billion dollars companies investing heavily in this sector. Franklin Resources, Inc., which currently operates as Franklin Templeton Investments, recently announced that the New York firm has acquired the remaining 80 percent equity stake of alternative investments specialist Pelagos Capital Management LLC, and it has officially become a 100 percent equity stakeholder.
It was back in 2010, when Franklin Templeton acquired its initial 20 percent equity stake in Pelagos Capital, an independent investment adviser founded in 2005 by Stephen Burke and John Pickart, and headquartered in Boston Massachusetts. One of the company’s most attractive features, is that Pelagos Capital implements a detailed investment process, that is driven by a top-down approach to global macroeconomics, quantitative concentrated models (based on analysis) and multi-level risk management. In doing so, Pelagos Capital is able to manage three distinct alternative investment strategies, including a commodity strategy, a managed futures strategy and a hedge fund replication strategy. Pelagos Capital’s primary objective is to identify alternative investment opportunities that could optimize overall returns on investment and lower portfolio risk exposure.
The initial deal originally was announced in November 2012, two months after Franklin Templeton announced the purchase of hedge fund-of-funds firm K2 from private equity firm TA Associates. With this acquisition, Franklin Templeton Alternative Strategies will oversees the company’s specialized and alternative investment businesses globally. In addition to Pelagos, these businesses include the multi-asset strategies and customized portfolios of Franklin Templeton Multi-Asset Strategies. Also adding to this, they will oversee the integrated hedge fund product solutions of K2 Advisors, in which Franklin Templeton holds a majority stake. Equally significant, Franklin Templeton will oversee the emerging markets private equity and finance capabilities of Darby Private Equity. Additionally, they will manage the global property and real asset offerings of Franklin Templeton Real Asset Advisors and the company’s asset management joint ventures in East Asian countries such as China and Vietnam.
With this acquisition, the company has adopted a more aggressive and long-term alternative investment strategy, that most analysts believe will work in favor of Franklin Templeton. With the demand for alternatives to traditional investments steadily rising, it is evident that investor confidence will continue to shift from stock and bond options, to the better investing experience offered by alternative offerings; like shipping container investments and other income producing assets.