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Portfolio > Alternative Investments > Hedge Funds

Top Portfolio Products: Franklin Templeton Takes Stake in K2 Fund of Hedge Funds

By Marlene Y. Satter

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New products introduced over the last week include the addition of the Brevan Howard strategy to one of its funds and Prospera Financial Services’ launch of a new virtual assistant program.

In addition, Franklin Templeton completed a majority stake acquisition in K2 Advisors, MFS added to its target date fund lineup and Hennessy Advisors completed its merger with FBR Funds.

Here are the latest developments of interest to advisors:

1) Franklin Templeton Buys Majority Stake in K2 Fund of Hedge Funds

Franklin Templeton Investments announced Thursday that it has completed the acquisition of a majority stake in K2 Advisors Holdings LLC, an independent fund of hedge funds manager, enhancing Franklin Templeton’s alternative investments and multi-asset solutions platforms.

The proceeds will be used by K2 to purchase all the equity currently held by TA Associates and retire all OF K2’s debt obligations. The current management of K2 has not sold any of its interests and has not received any up-front consideration in this transaction. Franklin Templeton will acquire the remainder of K2 over a multiyear period.

Morgan Stanley served as financial advisor to Franklin Templeton, and Bank of America Merrill Lynch and Freeman & Co. served as financial advisors to K2.

K2 was co-founded in 1994 by William A. Douglass III and David C. Saunders, managing directors. They have entered into long-term employment arrangements in connection with the transaction and will continue to manage the business. No changes are planned for the K2 investment management processes.

2) MFS Adds 5 Funds to Lifetime Funds Target Date Suite

MFS Investment Management announced Friday that it has added five funds t its Lifetime Funds target date suite, now offering funds in five-year increments through 2055. The new funds are designed to offer advisors and investors greater flexibility and choice.

The new funds are MFS Lifetime 2015 Fund (LFTDX), MFS Lifetime 2025 Fund (LTTAX), MFS Lifetime 2035 Fund (LFEAX), MFS Lifetime 2045 Fund (LTMAX) and MFS Lifetime 2055 Fund (LFIAX).

The funds are available through financial advisors as well as through retirement plan platforms.

3) Altegris Macro Strategy Fund Adds Brevan Howard to Portfolio

Altegris Advisors announced Wednesday a new allocation that accesses the Brevan Howard Emerging Markets Local Fixed Income strategy in the Altegris Macro Strategy Fund (MCRAX, MCRNX, MCRCX, MCRIX). The fund seeks to achieve absolute returns from income and capital appreciation by utilizing strategies.

The strategy from European hedge fund provider Brevan Howard, the second largest provider in Europe, is an actively managed liquid strategy that seeks exposure to fixed income returns primarily in global emerging markets in the Asia and Pacific region, Africa, Eastern Europe (including Russia) and Latin America. It takes actively managed exposures to fixed income securities and currencies and predominantly invests in government bond and financial derivative instruments referencing interest rates and currencies.

4) Hennessy Advisors Wraps Up Merger with FBR Funds

Novato, Calif.-based Hennessy Advisors (HNNA) said Oct. 29 that it wrapped up the acquisition of assets related to the management of the 10 FBR Funds.

The FBR Funds have been reorganized into the Hennessy Funds, bringing Hennessy’s total assets under management to some $3.1 billion and the total number of shareholders to about 180,000. (Hennessey Advisors’ and FBR Funds’ boards approved the merger earlier this year.)

Read the entire story, Hennessy Advisors Wraps Up Merger With FBR Funds, at AdvisorOne.

5) Prospera Financial Services Launches New Virtual Assistant Program

Prospera Financial Services announced Wednesday that it is now offering a new virtual assistant program for their independent financial advisors.

The new virtual sales assistant program was specifically created to give the advisor sales support on an as-needed basis. The virtual sales assistant works with advisors remotely to perform business-related services such as answering phones, creating mass mailings, opening new accounts and performing account maintenance. Advisors can choose from three different levels of service, depending on which duties they want the virtual assistant to perform; the three options vary in price.

Read the Oct. 26 Portfolio Products Roundup at AdvisorOne.

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