Gene Needles is making a strategic play in the active ETF business.

Gene Needles American Beacon Advisors Chairman, President, CEO

Needles (chairman, president, and CEO of American Beacon Advisors [profile]) confirms that the Irving, Texas-based subadvised mutual fund shop just bought a minority stake in New York City-based active ETF shop ARK Investment Management [profile]. The pricing and terms of the deal have not been disclosed.

The deal comes less than a month after MFWire reported that Needles was poised to make acquisitions and might even do a deal within a few weeks. Watch for Needles to do more deals, too, perhaps even this year. Indeed, to do the ARK deal, American Beacon has "created a multi-affiliate investment management holding company," details of which will be released later in 2016.

Meanwhile, Needles praises Cathie Wood (founder, CEO, and chief investment officer of ARK) and her team for the "institutional quality and enduring value" they offer investors. Wood notes that ARK is "the first boutique asset manager in which [American Beacon] is taking an ownership interest."

"We have looked at more than 150 different opportunities in my tenure and ARK was the first to check all the boxes in terms of investment process, manager expertise and cultural fit that we have been looking for in an investment opportunity," Needles states.

"The leadership team at American Beacon, with the full support of our private equity owners, has been working towards the goal of being a multi-affiliate investment management firm for quite some time," states Jeff Ringdahl, American Beacon's chief operating officer. "Now that we have made our first investment, we look forward to sharing additional details of our new corporate structure later this year."

Freeman advised ARK on the deal, while Colchester Partners advised American Beacon. American Beacon is backed by private equity shops Estancia Capital Management and Kelso & Company.

Wood is a veteran of AB, Jennison Associates, and hedge fund firm Tupelo Capital Management. She founded ARK two years ago with a specific focus on investing in what she calls "disruptive innovation."

American Beacon had $51.4 billion in AUM as of March 31. 

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