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Franklin Templeton Enters into Strategic Relationship with Pelagos Capital

November 17, 2010
From: Franklin Resources, Inc.
Contact: Bill Weeks
Telephone: (212) 632-3204

Leading Global Asset Manager Acquires 20% Equity Stake

In Alternative Investments Specialist

New York, November 17, 2010 – Franklin Resources, Inc. [NYSE: BEN], which operates as Franklin Templeton Investments, today announced that it has entered into a strategic relationship with Pelagos Capital Management, LLC, acquiring a 20 percent equity stake in the firm.

Pelagos, an independent investment advisor, was founded in 2005 and is based in Boston, Massachusetts. The firm’s mission is to create alternative investment solutions that enhance overall returns and lower portfolio volatility. Pelagos manages three distinct alternative investment capabilities including a commodity strategy, a managed futures strategy, and a hedge fund replication strategy. The Pelagos team implements an investment process highlighted by a top-down approach to global macroeconomics, quantitative focused models based on fundamental analysis, disciplined multi-level risk controls, and institutional-quality implementation and transparency.

“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 whose expertise complements Franklin Templeton’s global offerings and meets our world class standards,” said Greg Johnson, CEO of Franklin Templeton Investments. “This new relationship with Pelagos is an important step within our overall plan to expand Franklin Templeton’s alternative strategies platform.”

“Alternative investments are an important and growing part of our business,” said William Yun, CFA, executive vice president, Franklin Templeton Alternative Strategies. “We see tremendous opportunity for growth in the alternatives space as investors look for added alpha and increased diversification from their portfolio through a wider range of asset classes.”

Yun continued, “Pelagos’ product line and its mission to create alternative investment solutions that enhance overall returns and lower portfolio volatility is closely aligned with our own vision for the alternatives business. Pelagos also integrates a conservative risk-based philosophy in each of its investment strategies, which is consistent with Franklin Templeton’s well-established commitment to risk management.”

“We look forward to leveraging Franklin Templeton’s extensive global platform, product development expertise and established distribution network in bringing Pelagos’ investment strategies to Franklin Templeton clients worldwide,” said Stephen Burke, CEO of Pelagos Capital.

Established in 2008, Franklin Templeton Alternative Strategies encompasses:

  • The global asset allocation capabilities of Franklin Templeton Multi-Asset Strategies;
  • Franklin Templeton’s asset management joint ventures in Vietnam, China and Dubai;
  • Its wholly-owned local asset management groups in Brazil, Canada, India, Japan and Korea;
  • The emerging market private equity, mezzanine, and infrastructure capabilities of Darby Overseas Investments, and;
  • The global REIT and private multi-manager real estate and real assets capabilities of Franklin Templeton Real Estate Advisors.

Franklin Templeton Alternative Strategies is a unit of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Fiduciary Trust, Darby and Bissett investment teams. The San Mateo, CA-based company has more than 60 years of investment experience and over USD 664 billion in assets under management as of October 31, 2010. For more information, please visit www. franklintempleton.com .