Capital Deal Set to Shake Up the Active ETF Market

Includes: AADR, AGLS, FNDM
by: Shishir Nigam

The new developments are coming thick and fast for AdvisorShares and its parent company, (OTCPK:FNDM). On March 30th, announced that it has acquired Weston Capital Management, which is based out of West Palm Beach, Florida. Weston is involved in originating and marketing fund of funds as well as single-manager hedge funds and also raises capital to seed new hedge funds. Working together with AdvisorShares, now has the ability to provide hedge funds as well as actively-managed ETFs to institutional and retail clients.

Elaborating on possible synergies between AdvisorShares and Weston Capital, CEO of, Gregory Webster said: “Importantly, Weston has the global institutional relationships that can capitalize on AdvisorShares patent-pending exchange-traded fund platform as well as powerful distribution capability among institutions worldwide.” When Noah Hamman, CEO of AdvisorShares, spoke to ActiveETFs | InFocus, he placed special emphasis on the fact that AdvisorShares wants to bring Active ETFs to investors which are unique in their investment strategy and will likely have an “alternative bent.”

In relation to the acquisition of Weston, Noah also added: “Weston and AdvisorShares are perfectly complementary and we are looking forward to working with Weston to originate ETFs as well as help other managers launch their own ETFs and to market our actively managed ETFs to institutions worldwide with the expertise of Weston Capital’s established sales force. These activities will greatly expand our footprint in the rapidly growing market of actively traded ETFs.”

The CEO of Weston Capital, Albert Hallac, confirmed collaboration possibilities and said that they, “see great potential for growing our assets under management and related fee income by expanding our seeding platform to include the origination and development of new actively managed ETFs.” Weston intends to raise $250 million for its third incubation fund, Partners III, which will seed both hedge funds and actively-managed ETFs.

This announcement comes on the back of recent confirmation by of the launch of 2 new Active ETFs in April by AdvisorShares – the WCM/BNY Mellon Focused Growth ADR ETF (NYSEARCA:AADR) and the Mars Hills Global Relative Value ETF (GRV). Prior to that, in February, AdvisorShares also announced a partnership with Peritus Asset Management which resulted in the filing of a new Peritus High Yield ETF (HYLD). HYLD will invest high-yield debt securities selected by Peritus which follows takes a “deep value contrarian approach to the credit markets, foregoing relative value and new issue participation in favour of absolute returns”. The fee structure for this new ETF has not yet been announced.

Disclosure: No positions in above-mentioned names.