Franklin Templeton Investments has soft-launched a multi-manager long/short credit fund, Citywire Selector can reveal.
The Franklin K2 Long Short Credit fund follows hot-on-the-heels of the launch of the Franklin K2 Global Macro Opportunities fund last month.
It is the third liquid alternatives fund in the range following Franklin Templeton’s acquisition of K2 Advisors in 2012.
The new fund seeks to achieve a total return over a full market cycle through a combination of current income, capital preservation and capital appreciation whilst offering daily liquidity.
The fund’s assets will be allocated across a variety of alternative fixed income and credit strategies. These will be selected by a team at K2 which consists of David Saunders, Rob Christian, Jeff Schmidt and Charmaine Chin.
The initial set of sub-advisors will include: Apollo SA Management; EMSO Asset Management; Chatham Asset Management; Candlewood Investment Group; and, Ellington Global Asset Management.
The multi-manager approach will allow the sub-advisers to cover three market areas: credit long/short, structured credit and emerging market fixed income. This allows investors to access a wide range of markets through one portfolio.
The sub-advisers can invest across a wide range of fixed income securities including corporate loans, asset-backed securities and sovereign bonds. The fund can also utilise other instruments such as interest rate swaps, derivatives and ETFs.
Commenting on the launch, Saunders said: 'We are excited to introduce this fund as it provides retail investors access to a liquid, actively-managed alternative fixed income investment strategy that seeks to generate lower correlated sources of total return compared to traditional, long only fixed income investment options.'
'The combination of our active management and lineup of alternative credit managers is meaningfully differentiated in the marketplace,' he added.