Invesco, the asset manager behind the PowerShares brand of exchange-traded funds, has agreed a deal to acquire Guggenheim Investments’ ETF business for $1.2 billion in cash.
Martin L. Flanagan, president and CEO of Invesco.
The business includes around $37 billion of assets under management and will expand Invesco’s active, passive and alternative ETF capabilities and strengthen its ability to service institutional and retail clients in the US and across the globe
Guggenheim’s leading products include the $13.8 billion Guggenheim S&P 500 Equal Weight ETF (RSP), which provides equal-weight exposure to S&P 500 constituents, and the popular BulletShares suite of defined-maturity bond ETFs.
With the addition of Guggenheim’s line-up, Invesco’s ETF AUM will total more than $196 billion globally cementing its position as the fourth largest provider of ETFs behind BlackRock, Vanguard and SSGA.
The deal represents the asset manager’s second bolt-on purchase of an ETF business this year, following the acquisition of London-based Source last month.
Commenting on the acquisition, Martin L. Flanagan, president and CEO of Invesco, said: “Guggenheim Investments’ ETF business is highly complementary to Invesco’s, and will enable us to provide one of the industry’s most comprehensive and innovative ranges of smart beta ETFs, including fixed income, equal-weight and self-indexed product offerings.
“The acquisition further expands our ability to build better, more diversified portfolios through our solutions capability, and enhances the range of capabilities available via Jemstep, our advisor-focused digital solution. The addition enhances our ability to help meet client needs, which will help further accelerate the growth of our business.”
Dan Draper, global head of ETFs at Invesco, added: “The addition builds on our existing self-indexing capability and brings the highly popular BulletSharesETFs, both of which will further strengthen our ability to help clients achieve their investment objectives.”
The transaction will be funded using a combination of cash and debt, and is expected to close in the second quarter.