ETF Securities, the giant of the European ETF market that has amassed more than $4 billion in a suite of seven U.S.-listed products, is taking steps toward an initial public offering, according to The Wall Street Journal. The ETF issuer has reportedly retained Citigroup (NYSE:C) and Bank of America Merrill Lynch (NYSE:BAC) to discuss its strategic options, which may include an initial public offering depending on market conditions. No comment was available from either bank or from ETF Securities.
There has been no shortage of acquisition activity in the ETF space over the last several years, highlighting the appeal of the rapidly-growing industry. Guggenheim acquired both Rydex and Claymore, while BlackRock snapped up market leader iShares in a $13.5 billion deal. More recently Russell acquired Reno-based U.S. One, the issuer behind the One Fund (NYSEARCA:ONEF), and Ameriprise has launched a bid for the assets of Grail Advisors, a pioneer in the actively-managed ETF arena. And just last month, Millennium announced that it led a $70 million secondary share purchase in the equity of ETF Securities, citing the company's explosive growth and reputation as an innovator in the ETF industry as the primary attractions of the investment.
Most ETF issuers are either privately-held companies or operating divisions of larger publicly-traded companies. In the U.S., WisdomTree (WSDT.PK) is the only pure play publicly-traded ETF issuer. WisdomTree had assets under management of about $11.3 billion at the end of the first quarter. The company’s market capitalization is currently in the neighborhood of $780 million.
ETF Securities launched the first gold ETF in 2003 and the first oil ETF in 2005. The company’s lineup of European products includes a wide variety of commodity funds, including inverse and leveraged ETPs. ETF Securities broke into the U.S. market in 2009 with the debut of the ETFS Physical Silver Shares (NYSEARCA:SIVR), which now has close to $900 million in AUM. ETF Securities is also behind the only physically-backed platinum (NYSEARCA:PPLT) and palladium (NYSEARCA:PALL) ETFs listed on U.S. exchanges, and more recently unveiled a physical gold ETF that holds bullion vaulted in Singapore.
Disclosure: No positions at time of writing.
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