Franklin Resources Snaps Up Stake In Pelagos

Nov 18 2010 | 4:07am ET

Mutual fund giant Franklin Resources has taken a large minority stake in alternative investments firm Pelagos Capital Management.

San Mateo, Calif.-based Franklin, which manages the Franklin and Templeton mutual fund ranges, bought a 20% stake in Pelagos. Terms of the deal were not disclosed; Pelagos’ management team retains ownership of the remaining 80% of the firm.

“One of the ways we have built Franklin Templeton’s global business is by making strategic investments in small, yet highly experienced asset management companies,” Franklin CEO Greg Johnson said. “This new relationship with Pelagos is an important step within our overall plan to expand Franklin Templeton’s alternative strategies platform.”

Boston-based Pelagos was founded in 2005 by Stephen Burke, former senior global strategist at State Street Corp. The firm manages commodities, managed futures and hedge fund replication strategies, and has $377 million in assets under management.

Franklin Resources, by contrast, manages $664 billion.

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