Franklin Templeton Investments has bought San Francisco-based fin-tech start-up Random Forest Capital in a move that aims to boost the firm’s fixed income capabilities.
San Francisco, California-based Random Forest Capital, which was only founded in 2016, uses machine learning and statistical algorithms to analyze data gleaned from primarily non-bank, tech-focused, web-based platforms that originate secured and unsecured debt.
The firm’s data science expertise allows credit analysis to be done at a much faster pace than human analysts, according to its website. It has also built a cloud infrastructure that enables the team to take a large amount of unstructured data for analyzing and finding investment opportunities in consumer, residential, and commercial credit.
Terms of the transaction were not disclosed. The acquisition, which is expected to support Franklin’s research for and access to private lending investment opportunities, will see the Random Forest team joining Franklin’s fixed income investment team.
‘We continue to make strategic investments and acquisitions in emerging investment-related technologies to augment and support Franklin Templeton’s global offerings,’ said Jenny Johnson, president and chief operating officer of Franklin Templeton Investments.
‘The Random Forest team will complement our existing fundamental fixed income research with their expertise in private lending and bring the capability to support the firm’s broader information technology and data science initiatives.’
On a separate note, Franklin Templeton has filed with the Security and Exchange Commission for permission to launch the Templeton International Climate Change fund.
The fund, which will be managed by Maarten Bloemen, will take a bottom-up, value-oriented approach to select attractively valued companies that prepare for a low-carbon economy while also exhibiting superior practices in identifying, adapting and providing solutions to the consequences of climate change.
San Mateo, California-based Franklin Templeton had over $744 billion in assets under management as of February 28.