Private equity firms are considering potential investments in companies that oversee ETF managed portfolios, according to a report this week.
“The big-hit sensation of the mid-2000s was anything ETF,” Liz Nesvold, managing partner of Silver Lane Advisors, said in a Reuters article. “Now the focus is on how to use the ETFs.” [iShares Sees Growing Demand for ETF Managed Portfolios]
There are about 1,460 ETFs now available in the U.S. and the market is flooded. In response, ETF model portfolio firms are cropping up, and these are companies that manage a portfolio made up entirely of ETFs, reports Jessica Toonkel for Reuters.
A model portfolio invests in selected ETFs, and a portfolio manager can interchange those ETFs. Private equity firms such as FTV Capital, Aquiline Capital Partners LLC, Century Capital and Grail Partners are all seeking to invest in ETF portfolio managers, according to the report. [Should Advisers use ETF Managed Portfolios?]
Currently, BlackRock’s iShares ETF business keeps one of the most comprehensive lists of model ETF portfolios available today. Called the iShares Connect Program, it includes the majority of providers in the U.S., with more than 200 strategies run by 104 managers with a total of $46 billion in assets, reports Toonkel. [Why Managed ETF Portfolios Are Hot]