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Monday, March 16, 2009

Barclays Eyes Selling its Shares

by: Armie Margaret Lee

Barclays hired UK investment bank J.P. Morgan Cazenove to help find a buyer for its iShares business, The Wall Street Journal reports.

Part of San Francisco-based Barclays Global Investors, iShares is the largest ETF player and according to an unnamed Journal source, it could fetch 4 billion ($5.6 billion). The purchase price would represent 2.19 percent of iShares' assets under management at the end of 2008.

The iShares business, led by Lee Kranefuss, commands 47.9 percent of the ETF market with $254.7 billion in assets at the close of 2008, according to Cerulli Associates data.

Some analysts value the whole of BGI at 5 billion ($7.04 billion), the Journal reports.

In a statement posted on its Web site on Monday (see the complete statement after the chart below), Barclays confirmed it has held talks with "a number of potentially interested parties" regarding the potential sale of the iShares business.

"Barclays notes press comment regarding the potential disposal of iShares and confirms that it has held discussions with a number of potentially interested parties as part of its practice of regularly reviewing the group's portfolio of businesses," the statement read. "No decision regarding the disposal of any business has been taken by the board of Barclays."

iShares' rivals in the business include State Street Global Advisors, which operates the SPDR family and holds a 30.2 percent share of the market; Vanguard, with an 8.6 percent market share; Invesco PowerShares, which has a 4.1 percent share and ProFunds, which has 3.9 percent, according to Cerulli data.

Top 15 ETF Managers in 2008
Asset Manager ETF AUM
$Bil
Share %
1. Barclays Global Investors $254.7 47.9 %
2. State Street Global Advisors 160.7 30.2
3. Vanguard 45.5 8.6
4. Invesco PowerShares 21.8 4.1
5. ProFunds 20.5 3.9
6. Bank of New York 6.8 1.3
7. Van Eck 4.5 0.8
8. Rydex Global Advisors 4.2 0.8
9. DB Commodity Services 3.4 0.6
10. U.S. Commodity Funds 3.3 0.6
11. WisdomTree 3.2 0.6
12. Claymore Advisors 1.0 0.2
13. Rafferty Asset Management 0.9 0.2
14. First Trust Advisors 0.7 0.1
15. Deutsche Bank 0.2 <0.1
Top 15 Total Assets 531.5
Source: Strategic Insight/SIMFUND, Cerulli Associates
* * *

Statement from Barclays

Barclays notes press comment regarding the potential disposal of iShares and confirms that it has held discussions with a number of potentially interested parties as part of its practice of regularly reviewing the Group's portfolio of businesses. No decision regarding the disposal of any business has been taken by the board of Barclays.

Barclays businesses continue to perform well and have had a strong start to 2009.

Barclays also confirms that it is in dialogue with HM Treasury and FSA regarding its potential participation in the Government's Asset Protection Scheme. Barclays decision whether and to what extent to participate in the scheme will be based on the economic merits to shareholders of any such participation.
 

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