Franklin Resources Buys 20% Stake in Pelagos to Expand Alternative Funds
Franklin Resources Inc., owner of the Franklin and Templeton mutual funds, bought a 20 percent stake in Pelagos Capital Management LLC to offer more alternative investments. Terms weren’t disclosed.
Pelagos, based in Boston, focuses on commodities, managed futures and a strategy to mimic hedge funds, Franklin said today in a statement. The five-year-old firm, run by Chief Executive Officer Stephen Burke, oversees $377 million.
“One of the ways that we have built Franklin Templeton’s global business is by making strategic investments in small, yet highly experienced asset-management companies,” Greg Johnson, chief executive officer of the San Mateo, California-based company, said in the statement. “This new relationship with Pelagos is an important step within our overall plan to expand Franklin Templeton’s alternative strategies platform.”
Franklin in 2008 established an alternative-strategies business that encompasses global multi-asset allocation, joint ventures and wholly owned units in countries including Brazil, China, India, Japan and Vietnam. It offers emerging-market private equity, mezzanine and infrastructure investing, and real estate and real assets. The company oversees $664 billion.
Franklin rose $1.24, or 1.1 percent, to $115.55 at 4:15 p.m. in New York Stock Exchange composite trading. The stock has gained 9.7 percent this year, compared with the 3.3 percent increase by the Standard & Poor’s 15-member asset manager and custody bank index.
Before co-founding Pelagos, Burke worked at Boston-based State Street Corp., where he held posts including senior global strategist, head of global strategic asset allocation and head of taxable fixed income at the company’s fund unit.
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