WisdomTree Targets European ETFs04.24.2014
Hector McNeil, co-chief executive of Boost ETP, said the European exchange-traded products provider is going to hire staff and expand into new geographies and asset classes following its acquisition by US-based WisdomTree Investments.
WisdomTree Investments, which has $33.1 billion in ETF assets under management, completed its acquisition of Boost ETP on April 17, allowing it to start building a local European platform.
McNeil and Nik Bienkowski, founders of Boost, will become co-chief executives of WisdomTree Europe. The combined firm will offer a range of UCITS ETFs under the WisdomTree brand and keep the Boost lineup of short and leveraged fully collateralized ETPs under the Boost brand.
McNeil said: “The deal with WisdomTree gives us $20 million of working capital for product development, to hire new people and introduce new listings.”
Boost ETP currently lists 60 products, 25 in equities and 35 in commodities according to its website.
McNeil said: “A year from now Boost/WisdomTree Europe could have about 100 products across multiple exchanges in Europe. We have listings in London and Italy and will look to add Germany, France and maybe one Nordic country.”
This month, Boost ETP reported that assets under management have increased by 130% since the start of the year to reach a record $97 million. Since January Boost has had $56 million of net inflows.
Inflows into equity ETPs of $21 million were into both long and short products, while $35 million of inflows into commodity products were dominated by short exposure to natural gas, long exposure to silver and long exposure to oil.
“In equities we could add emerging market products and other equity sectors,” McNeil added. “In other asset classes we want to add fixed income covering the liquid products and the main foreign exchange markets.”
Boost employs 12 staff and McNeil said the number could double in 12 to 18 months.
McNeil and Bienkowski launched Boost in October 2012 after leaving ETF Securities, the exchange-traded commodities provider, where they were managing partners as assets rose from $50m to $22bn.
They wanted to launch an independent provider in a European market dominated by large investment banks and diversified financial institutions who faced new regulations and to specialize in short and leveraged fully collateralized ETPs aimed at active traders, rather than vanilla index trackers.
“Pension funds in Italy and Germany are more active in ETFs and in the UK they are starting to become active,” said McNeil. “In the UK the big push into ETFs will be when active and mutual funds have to make full disclosure of their total fees.”
When the boost acquisition was announced Jonathan Steinberg, WisdomTree chief and president, said in a statement: “We have an important marketing relationship with the Compass Group to serve Latin America and we have made some of our ETFs available for sale in Mexico and Japan. As the second largest ETP market after the US, Europe is a strategically important market and is the next natural step given our stage of development.”
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