New York-listed Franklin Resources, which operates as
Franklin Templeton Investments, has agreed to acquire a majority stake inK2
Advisors Holdings, an independent fund of hedge funds firm with $9.2 billion of
assets, for an undisclosed sum.

The proceeds of the acquisition will be used by K2 to buy
all equity currently held by TA Associates and to retire all of K2’s debt obligations. The current management of K2 will not sell any of its interests at this time and
will receive no up-front consideration in the deal, according to a statement
fromFranklin Resources.

Starting in 2016, Franklin Templeton will acquire the
remainder of K2 over several years. The transaction
is subject to regulatory approval and expected to close in the calendar fourth
quarter of 2012.

 K2 was co-founded in
1994 by William Douglass and David Saunders and is based in Stamford, Connecticut.
The men have entered into long-term employment arrangements and will continue to
manage the business. No changes are planned for the K2
investment management processes.

Besides its Stamford office,
K2 has offices in New York City, London, Tokyo, Hong Kong
and Sydney. Franklin
Resources had $731 billion in assets under management as at 31 August.