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Franklin Templeton Alternative Capabilities
We believe our clients face a complex investing landscape that demands an intelligent approach beyond traditional asset allocation. As an innovator in seeking new, uncorrelated active return sources, we have the experience, scale, and scope to meet the needs of our clients.
- POTENTIAL BENEFITS OF
- OUR CAPABILITIES
- SHARED INTELLIGENCE
- INVESTMENT STRATEGIES
Alternatives have the potential to provide long-term risk and return benefits to an investor's portfolio. We believe that the actual risk, especially of hedge strategies, is often misunderstood.
Enhance Potential Return Opportunities
May Help Reduce Portfolio Risk
Improve Overall Diversification
An important goal of using hedge strategies in a portfolio may be to help reduce loss of investment value during periods of extended or extreme market downturns. However, well-managed hedge strategies could potentially also participate in upward moving markets, thereby positively impacting a portfolio's overall risk/return characteristics. As evidence, hedge strategies have an Up Market Capture Ratio of over 49% while capturing only 31% in Down Markets over the last 20 years.
(Source: Factset. Data for the 20 year period ending 12/31/2015. Hedge strategies represented by HFRI Fund Weighted Composite Index.)
For illustrative purposes only: does not represent any Franklin Templeton product. Past performance does not guarantee future results.
Finding active, long-only managers that deliver consistently high alpha above and beyond that of a benchmark has historically proven difficult. By investing in hedge strategies, portfolios can potentially have a new source for alpha opportunities. For instance, over the 20-year period ending 12/31/2015, hedge strategies (represented by the HFRI Fund Weighted Composite Index) have delivered persistently high alpha levels relative to global equities (measured by the MSCI World Index). In fact, the average alpha level for hedge strategies was over 5.0% over this same period encompassing many different market cycles. Adding hedge strategies to an institutional portfolio can help capture these potential alpha opportunities.
Source: FactSet. For illustrative purposes only; does not represent any Franklin Templeton product. Past performance does not guarantee future results. Alpha is a measure of a portfolio's return in excess of market return, after being adjusted for risk. 12-Month Rolling Alpha is calculated by looking at the previous 12 months of performance history and moving forward on a monthly basis.
See www.franklintempletondatasources.com for additional data provided information.
A craftsman is only as good as the tools available in his toolkit, and we believe the same principle applies to active investment portfolio management. Alternatives provide more tools aimed at meeting underlying objectives...client objectives."William Yun, CFA
Executive Vice President and Head of Alternative Strategies
WHY CONSIDER FRANKLIN TEMPLETON FOR ALTERNATIVES
Prudent, risk-managed investing in alternative asset classes and strategies requires specific knowledge and expertise honed over many years through various market cycles. Franklin Templeton can offer the following:
Broad alternative capabilities from specialized alternatives teams
Proven history of innovation
Global operational strength
Experience with a diverse client base
- We believe our clients face a complex investing landscape that demands an intelligent approach beyond traditional asset allocation. Whether they are seeking to improve riskadjusted returns, increase diversification, or better insulate their portfolios from market volatility, an alternative intelligence is required to meet an increasing demand for better investment outcomes. For our clients, it’s about achieving the right returns in the most efficient manner.
- The requirement to invest at least 85% in liquid assets does not appear to have a negative impact on historical performance relative to less liquid traditional hedge funds; in fact, historical data generally suggest the opposite.
- Industry dynamics provide incentive for quality hedge fund managers to subadvise liquid alternative mutual funds, giving investors a breadth of access to a universe of alternative strategies.
- Global real estate, as an asset class, has evolved past the stark distinction between “direct” and “indirect” real estate investment. Investors are seeking increased transparency, greater control and lower cost in their real estate portfolios.
- These benefits are potentially available through a new and developing universe of local partners, who offer a range of investment opportunities on the continuum between “direct” and “indirect.”
- Real estate co-investments and joint ventures are increasingly available as real estate fund managers find it harder to compete for capital with the “mega funds.”
- Relative to investing in real estate funds, these single-asset or small portfolio transactions offer the possibility of attractive returns, favorable terms, and the ability for investors to control portfolio construction.
- We believe commercial real estate continues to be an attractive asset class for institutional investors looking for diversification, historically attractive returns and potential income generation.
- The addition of investments sourced from emerging managers can provide additional benefits due to their historical outperformance against larger peers.
K2 ADVISORSK2 Advisors is an organization with 20 years of experience focused solely on hedge strategy investing. We are committed to rigorous review of managers and have developed proprietary systems designed to monitor sources of return, portfolio exposures, and risks. Over its history, K2 has grown into one of the largest advisors of its type offering alternative solutions to its institutional and retail client base.
Founding Managing Director
STRATEGIESFranklin Templeton offers the following Alternative strategies to institutional investors through its multi-boutique investment platforms. Many of these strategies can be accessed via custom solutions, pooled vehicles and separate accounts*.
HEDGE FUND STRATEGIES
- Long/Short Equity (Generalist, Technology, Health Care,
Commodities, Europe & Asia)
- Equity Market Neutral
- Specialist Credit
- Structured Credit
- Event Driven
- Global Macro (Discretionary, Systematic)
- Convertible Arbitrage
- Volatility Arbitrage
- Liquid Alternatives
- Hedge Fund Replication
- Customized Portfolios
- Listed Infrastructure
- Listed Real Estate
- Private Real Estate
PRIVATE EQUITY & DEBT
- Private Equity
- Mezzanine Financing
- Infrastructure Financing