Alternatives

Through our alternative investments offering, covering hedge funds, mezzanine finance, private equity, commodities and real assets, Franklin Templeton offers investors additional sources of diversification and a broader opportunity set while maintaining our conservative values. In addition to offering standalone strategies, Franklin Templeton Solutions is designing, creating and managing outcome-oriented investment portfolios to meet the specific needs of clients.

Franklin Templeton Solutions

Overview

Franklin Templeton Solutions is a global investment management group committed to creating total portfolio solutions integrated with risk management to help investors achieve their financial goals regardless of market conditions. Because of this commitment, we continue to expand and improve our investment capabilities to provide a spectrum of solutions, from benchmark-oriented to outcome-oriented, to meet unique client goals. Total Portfolio Solutions are constructed and managed by Franklin Templeton Solutions’ three specialized investment teams: Long-Only Multi-Asset, Tactical Asset Allocation and Alternative Strategies, who have access to global resources and investment expertise in North America, Asia, Europe, and the emerging economies of the Middle East and South America.

Investment Philosophy

The Franklin Templeton Solutions team’s philosophy combines a top-down and bottom-up approach in order to deliver diversified, actively managed investment strategies.

    • From the top-down, analysts focusing on strategic allocations develop long-term capital market expectations over a market cycle using independent quantitative analysis blended with fundamental research infused with the insights gained from FTI’s specialized investment professionals around the world.
    • Combining top-down and bottom-up perspectives, the Global Investment Committee (GIC) aims to identify short-term tactical opportunities and risks taking place in the current market environment, within both the macro markets and investment strategies.
    • From the bottom-up, manager research analysts aim to create an optimal mix of investment strategies for each asset class from a defined universe by identifying complementary strategies across market cycles

Investment Process

Portfolios managed by seeking to add value from three sources:

Strategic asset allocation establishes clear objectives for each individual portfolio or investment solution, objectives that include risk and return profile and target weightings for various asset classes and currencies. This group of experts conducts qualitative macroeconomic reviews to determine current investment themes and look at regional factors such as liquidity, economic and financial indicators, growth, and valuations to provide asset allocation recommendations. Over the short-term, tactical asset allocation recommendations help portfolios position to capitalize on opportunities and risks taking place in the current market environment within a given portfolio’s established investment objectives and risk profile. Manager and strategy research recommendations are derived through in-depth quantitative and qualitative analysis, portfolio optimization techniques, disciplined due diligence and manager review processes – techniques used to provide fund recommendations and model portfolios. Ultimately, during portfolio construction, strategic/tactical asset allocation recommendations and mandate research is utilized to assemble portfolios to maximize risk-adjusted return within the context of each portfolio’s objectives and tolerances. The portfolios are subject to constant review and risk management to help ensure the performances of underlying holdings continue to support the portfolio’s strategic objectives.

Investment Managers – Franklin Templeton Solutions Snapshot:
Established 19941
Style Multi-style / Multi-region / Multi-manager
Strengths Multi-Asset Solutions
Global Tactical Asset Allocation
Custom/Advisory Solutions – Alternative & Traditional
Hedge Fund Portfolios (Multi- & Single Strategy) & Replication

K2 Advisors*

K2 Advisors was founded in 1994 to focus solely on hedge fund investing. K2's investment philosophy is centered around a steadfast focus on risk—measuring, managing and monitoring—while seeking to generate asymmetric returns in various economic environments.

A pioneer in requiring the disclosure of portfolio holdings from its managers, K2 has developed an extensive set of proprietary analysis and risk-modeling tools that blend the art and science of manager research with asset allocation. K2 Advisors focuses on delivering a client-centric approach and providing investors with individualized attention and customized programs.

K2 Advisors Snapshot:
Established 1994
Style Multi- and Single-Strategy Hedge Fund Portfolios
Capabilities Commingled Products
K2 Custom Solutions
Strategic Advisory
Liquid Alternatives
Strengths
  • Consistent Growth Over Time
  • Pioneer in Risk Transparency
  • Experienced Team with Advanced Technology
  • Rigorous Manager Due Diligence
  • Client Centric Culture

* Franklin Templeton Investments acquired a majority stake in K2 Advisors on 1 November 2012.

Templeton Global Macro

Templeton Global Macro has been a pioneer in unconstrained global fixed income investing for almost three decades, beginning with the launch of its flagship Templeton Global Bond Fund in 1986. The team conducts in-depth global macroeconomic analysis covering thematic topics, regional and country analysis, and interest rate, currency and sovereign credit market outlooks.

The team applies a fundamental, research-driven investment approach that focuses on identifying potential sources of high current income worldwide and seeks to capitalize on duration, currency, and sovereign credit opportunities to provide the best potential for solid risk-adjusted returns.

Templeton Global Macro follows a well-defined research process characterized by a regular review of investment opportunities. This process features forums scheduled throughout the month to share information on potential sources of alpha generation and to review current holdings and potential risk factors. Team members meet daily to discuss ongoing market activity, as well as political and macroeconomic events.

Templeton Global Macro Snapshot:
Established 1986
Style Global Unconstrained Fixed Income
Capabilities Unconstrained Fixed Income, Currency, Global Macro
Strengths
  • Well-established and proven investment philosophy and process
  • Flexibility to express positive or negative views on global currencies and duration
  • Global investment platform spanning the Americas, Europe and Asia allows for specialized expertise and a truly global perspective
  • 17 investment professionals, 7 with Ph.Ds.1

Franklin Templeton Fixed Income Group®

The Franklin Templeton Fixed Income Group is an integrated global fixed income platform comprising over 100 investment professionals located in offices around the world. The group launched its first fixed income portfolio more than 40 years ago and has been managing money for the Institutional market for more than 30 years.

A global fixed income leader, the group has depth and breadth of expertise in all major sectors of the fixed income market, including investment grade and high yield corporate bonds, mortgage- and asset-backed securities, global sovereign and emerging market debt, municipal securities and bank loans. Each sector is covered by a dedicated team, enabling us to thoroughly examine the market and seek unique opportunities. Our global perspective is enhanced by dedicated local teams in many nations and a quantitative research team that participates in research and portfolio reviews. This global framework, significant bottom-up resources and integrated quantitative group enable us to build portfolios with a disciplined approach.

  • Top-Down Analysis. Senior leaders set the outlook for markets, sectors and currencies based on analysis of global economic trends and fixed income market cycles.
  • Bottom-Up Research. Dedicated sector specialists undertake detailed, proprietary research to focus on finding the relative value opportunities within their field.
  • Quantitative Analysis/Risk Management. Understanding risk is crucial to the investment management process. A dedicated team continually evaluates risk over economic and credit cycles.
Franklin Templeton Fixed Income Group Snapshot:
Established 1970
Style/Capabilities Fixed Income
Capabilities Single and Multi-Sector Strategies
Strengths
  • Dedicated fixed income professionals located around the world
  • Disciplined and risk management measures
  • Pursuit of diversified sources of potential alpha across securities, sectors and global markets