Franklin Resources on Tuesday announced it acquired Random Forest Capital, an emerging money management firm that invests in marketplace, or peer-to-peer, lending by using machine learning and statistical algorithms.
Terms were not disclosed, nor were Random Forest's assets under management.
Random Forest's staff — including co-founders Austin Trombley, chief technology officer, and Kevin Farrelly, chief operating officer — will become part of the Franklin Templeton Fixed Income Group, said Roger Bayston, senior vice president and director, fixed income, in aTempleton Fixed Income Group, said Roger Bayston, senior vice president and director, fixed income, in an email.
The Random Forest team will continue to manage a private fund "in addition to bringing their data science and marketplace lending expertise" to Franklin's fixed-income business, Mr. Bayston said.
"We have been researching the marketplace lending asset class, but have not invested yet," Mr. Bayston said. "Such investments will be new activity that complements our existing capabilities. We do not have any immediate plans to offer new products. Our initial focus will be on incorporating Random Forest's data science and marketplace lending expertise into our existing capabilities."
Random Forest uses machine learning and statistical algorithms to find and analyze private lending investment opportunities, primarily from non-bank, technology-focused, web-based loan originators, according to a news release from Franklin. The firm also has a scalable cloud infrastructure used to take massive amounts of unstructured data to use for predictive investment insights.
Franklin Resources had $744 billion in assets under management as of Feb. 28, according to the release. Franklin Templeton Fixed Income Group had more than $280 billion in AUM as ofTempleton Fixed Income Group had more than $280 billion in AUM as of Dec. 31.