Franklin's K2 Alternative Strategies Fund Reaches $1.3B in AUM

Jun 17 2015 | 3:30pm ET

Franklin Templeton’s K2 Alternative Strategies Fund has surpassed $1.3 billion in assets under management. 

The liquid alternative fund was launched in 2013 and has become the fastest-growing Franklin Templeton fund of all time over the past five years, according to a Reuters article citing the company. 

The K2 Alternative Strategies fund is aimed at providing retail investor access to sophisticated investment strategies as well as low cost and high liquidity. Typically, such strategies are restricted to hedge funds, which often have six-figure minimums and multi-year capital lock up periods. 

K2, on the other hand, allows investors to invest as little as $1,000 to the fund in the United States and $5,000 elsewhere. The fund then places capital into positions advised by well-known hedge funds such as Chilton Investment Company, York Capital Management and Graham Capital Management.

Moreover, investors in typical hedge funds pay performance fees that can top 20% of any profits in addition to management fees that can run 1-2% annually. K2, meanwhile, charges only flat management fee.

"Although K2 has been investing in hedge funds for over 20 years, we have seen a growing level of demand, especially since 2008, for alternative investment opportunities particularly in a more daily liquid format," David Saunders, founding managing director of K2 Advisors, in a statement. 

The success of the fund speaks to the strong demand among retail investors for liquid alternative products, an industry segment that has grown by approximately 40% annually since the financial crisis, according to data from Deutsche Bank. 


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