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Rating:Rydex Fund Services' Buyer Targets Liquid Alts Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, August 1, 2016

Rydex Fund Services' Buyer Targets Liquid Alts

Reported by Neil Anderson, Managing Editor

Rydex Fund Services is being acquired by a giant, publicly-traded Japanese bank, and servicing liquid alternatives is the main attraction.

John Sergides
MUFG Investor Services
Global Head of Sales and Marketing
The deal, unveiled Thursday, entails MUFG Investor Services buying RFS from Guggenheim Investments next quarter. MUFG Investors is the global asset servicing arm of Mitsubishi UFJ Financial Group.

John Sergides, global head of sales and marketing at MUFG Investor Services, joined the company in December when MUFG Investor Services bought UBS Asset Management's alternative fund services business. Now MUFG Investor Services want to help its alternative asset manager clients offer mutual funds and ETFs.

"[Liquid alternatives] was a noticeable gap in our product offerings out there," Sergides tells MFWire. "A lot of clients are looking to try to fill [that gap] ... You need to have a substantial enough platform that can grow easily to keep up with client demand."

RFS has 115 employees servicing $52 billion in assets under administration, mostly in Guggenheim mutual funds and ETFs (some of which use the Rydex brand). When asked about acquiring other mutual fund or ETF servicing businesses, Sergides says "Never say never." Yet he describes RFS as "the right acquisition to grow organically from here."

"We certainly think that we've covered this space," Sergides says, adding that RFS "brings all capabilities required."

A spokesman for Guggenheim told MFWire that "Mitsubishi does intend to retain all current Rydex Fund Services management and staff." And Sergides clarifies that the RFS deal is "not about cost."

"We're not buying these businesses to grow ever larger and to drive out cost from the platform," Sergides says. "We never have redundancies. We're not buying this for a cost play."

"We have never gone in for a model that's just lowest cost," Sergides adds. 

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