Last week, Invesco announced the planned acquisition of OppenheimerFunds following the successful integration of Guggenheim ETFs. We have benefited from the consolidation of the industry and we’re not surprised by the news. We expect additional accretive deals to be structured and lead to an acceleration of the growth and scalable profitability.
This news also inspired us to research the history of mergers and acquisitions within the ETF ecosystem. These corporate actions can unlock value, expand distribution, or allow access to new markets. We also found many acquisitions as pure investments. Our friends at Alpha Architect wrote a great piece on ETF M&A a few months back: Understanding the state of the ETF industry through mergers acquisitions and fragility. Our insights into deals that made sense and those that were set for failure are probably also of interest to many investors.
We have compiled our own list of activity which we believe to be comprehensive, but unlikely to be complete. We encourage all the ETF Nerds and ETF Think Tank members to help us catalog all the ETF ecosystem M&A activity.
The TETF.index research team began our deep dive with the activity in 2018:
We have already discussed the aggressive actions by Invesco to acquire more market share in the US ETF market. They may have also acquired a unique asset from Guggenheim; leveraged and inverse exemptive relief which Guggenheim retained from Rydex. The other major transactions seem to be focused on opening new geographic distribution. Mirae appears to have acquired Global X Funds to consolidate their US footprint and has already started to combine their Horizon US ETFs under the Global X brand. AGF, a successful Canadian asset manager now has fully consumed Boston based Quantshares. So far with the exception of WisdomTree’s strategic acquisition ETF Securities Europe, 2018 has seen the most corporate transaction focused on US ETF market share and participation.