Franklin Templeton lures European investors with bullish new cat bond launch

Global investment management firm Franklin Templeton has expanded its range of liquid alternative solutions for European clients with the launch of two new funds - Franklin K2 Cat Bond UCITS and Franklin K2 Athena Risk Premia UCITS.

The company believes the new funds will be attractive for investors seeking to reduce volatility and improve portfolio returns, especially in the current uncertain environment.

The new funds, which are both domiciled in Luxembourg, will be registered in 11 European countries, including Germany, France, Italy and the UK.

The launch brings the total number of liquid alternative strategies within the FTAF range to eight.

Franklin Templeton said the investment objective of the K2 Cat Bond fund is to generate attractive risk-adjusted returns and compelling current income over time with limited correlation to other asset classes through investment in a portfolio of natural catastrophe bonds. This fund is managed by Jonathan Malawer, managing director, head of ILS, commodities and environmental strategies. He is also responsible for the evaluation and selection of hedge fund managers in these strategies.

The K2 Athena Risk Premia fund aims to achieve long-term capital appreciation with lower volatility relative to broader equity markets and substantially less correlation to traditional asset classes over a full market cycle by pursuing various risk premia strategies. The fund is managed by Paul Fraynt, head of alternative risk Premia.

The two new funds follow the launch of the Franklin K2 Emso Emerging Markets UCITS Fund in December 2020. The FTAF range was initially launched in October 2019 and offers European investors access to a robust range of liquid alternative strategies in a UCITS format with daily liquidity and transparency from K2 Advisors, one of the pioneers in the development and use of low fee liquid hedge funds, through their Managed Accounts Platform (MAP).

Bill Santos, senior managing director at K2 Advisors, said: “Since the launch of our flagship fund in 2013, we have experienced growing demand for K2 Advisors’ full suite of investment research and management capabilities, along with risk and performance analytics services, in a transparent and liquid UCITS structure. We are continuing to see client demand for advisory, portfolio completion and hedge fund manager access services.”

Julian Ide, head of EMEA distribution at Franklin Templeton, added: “The launch of the Franklin K2 Cat Bond and Franklin K2 Athena Risk Premia funds is another milestone in our commitment to broadening our UCITS range of liquid hedge strategies and alternative investment capabilities. As one of the biggest providers of alternative solutions globally with $131 billion in AUM, our goal is to provide a choice of differentiated strategies within our cost-effective product range of liquid alternative solutions to European clients.”

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