October 1, 2019 / 6:09 AM / a month ago

Franklin Templeton's K2 expands in Europe with new fund range

LONDON (Reuters) - Asset manager Franklin Templeton said its K2 Advisors hedge fund investing business has expanded in Europe with the launch of a new fund range in Luxembourg to give local investors access to U.S.-based managers.

K2’s platform allows investors to build a portfolio of investments across multiple funds at discounted rates. The new funds allow clients to get their money back on a daily basis rather than quarterly.

The fund range will have strategies from five managers - Bardin Hill Investment Partners, Chilton Investment Company, Electron Capital Partners, Ellington Management Group and Wellington Management - Franklin said in a statement.

Bill Santos, Senior Managing Director at K2 Advisors, said it would look to expand the range of managers and funds on offer and had seen strong demand from clients in Italy, Germany, Spain and elsewhere in the region to invest.

K2 currently manages $10.6 billion in assets on behalf of institutional and retail clients, with around 60% of its assets managed for institutional investors using its platform.

In return for reduced management fees of between 1% and 1.5% and performance fees of between 12.5% to 15%, Santos said K2 aimed to ensure each manager attracted at least $1 billion in fresh assets under management.

Many hedge funds have struggled to outperform during a decade of easy money from central banks, prompting some investors to pull their cash and a number of funds to close, but more aspiring managers continue to try their luck.

Data from industry tracker Hedge Fund Research said 289 funds were launched in the first half of the year, although that was outnumbered by the 399 funds that shut down.

The estimated average management fee for newly launched funds in the second quarter was 1.25%, HFR said, while the average performance fee was 15.65%.

(This story has been refiled as the Company corrects spelling of Bardin Hill, paragraph 3)

Reporting by Simon Jessop. Editing by Jane Merriman

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