Martin Gilbert’s AssetCo has reached a deal to buy a 63% stake in Rize ETF, in a deal worth £ 16.5million.
AssetCo has also committed an additional investment of £ 5.25million to help fund the growth of Rize ETF.
The stake will be acquired from J&E Davy Holdings.
The acquisition is expected to close on July 27, 2021 and is not conditional on regulatory approvals.
The Board of Directors of AssetCo believes that there is “enormous growth potential” in the area of investment in thematic ETFs.
Once the acquisition is finalized, Gordon Neilly, advisor to AssetCo, and Gary Collins, head of distribution at AssetCo, will join the board of directors of Rize ETF.
The intention is for AssetCo to fund the counterpart for Rize ETF from equity financing through accelerated build-up of pounds for approximately £ 25million.
This will be launched in due course and a separate announcement will be published to provide more details on this.
Rize ETF is considered the leading specialist thematic ETF issuer in Europe, with $ 450 million (£ 327 million) in assets under management (AUM).
Thematic ETFs allow investors to invest in investment opportunities outside of traditional sectors. According to Morningstar research, the thematic fund’s global total assets under management reached $ 595 billion in March 2021, up from $ 174 billion three years earlier. Europe accounted for more than half of these assets under management.
Assets under management invested in thematic funds represent 2.1% of all assets invested in equity funds globally, up from 0.6% 10 years ago.
In Europe, the total amount allocated to thematic ETFs is estimated at more than $ 40 billion.
To date, Rize ETF has launched four thematic ETFs: Cybersecurity and Data Privacy; Educational technology and digital learning; Medical cannabis and life sciences; and Sustainable future of food.
Following the acquisition, management and employees will hold an effective 37% stake in Rize ETF, of which 5% is subject to certain short-term performance conditions.
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AssetCo Vice President and General Manager Peter McKellar said: “Our strategy is to position AssetCo to take advantage of the structural changes occurring in the asset and wealth management industry, such as the increasing use of technology to help individual investors and their advisors.
“Rize has the team, pedigree and expertise to grow significantly and continue to offer innovative products to investors, creating a world-class thematic ETF business.
“We look forward to working with the Rize ETF team to grow the business and deliver value to AssetCo investors and shareholders. “
AssetCo is a company primarily involved in the acquisition, management and operation of asset and wealth management activities and interests.
Earlier this month, he struck a deal with private equity firm Preservation Capital Partners to acquire a 30% stake in Parmenion.