is making a $25-billion-AUM ETF acquisition across the pond.
| Marty Flanagan|
President and CEO
Yesterday Flanagan, president and CEO of Atlanta-based Invesco
a deal to buy London-based Source
in a cash deal (the pricing and terms were not disclosed) expected to close in Q3 2017. Source was initially launched eight years ago as a joint venture by five big banks (Bank of America Merrill Lynch
, Goldman Sachs
, J.P. Morgan
, Morgan Stanley
, and Nomura
), and it is currently majority-owned by private equity giant Warburg Pincus
. The banks remain minority shareholders, and J.P. Morgan advised source on the deal.
, and Pensions & Investments
all covered the news.
Invesco is no stranger to the UK, and its PowerShares
] unit is the fourth biggest U.S. ETF shop with more than $122 billion in AUM in the U.S. alone as of earlier this week
). Flanagan is pitching the Source deal as expanding Invesco's factor-based ETF capabilities, boosting Invesco's ETF distribution in EMEA (Europe, the Middle East, and Africa), and increasing Invesco's global ETF scale. The deal, he says, "will significantly enhance [Invesco's] ability to deliver meaningful solutions to institutional and retail clients in Europe and around the world."
, senior managing director and head of EMEA for Invesco, praises source as "a leading independent, diversified, at-scale ETF provider in Europe that is highly regarded for its product innovation." Mike Paul
, executive chairman for Source, says "the combined business will be a true leader in the ETF market across Europe."
The Invesco deal comes after Lee Kranefuss, formerly Source executive chairman and Warburg Pincus executive-in-residence, moved on from Source last fall. Last year he founded
a new, hedge-fund-like ETF strategist.
Source is no stranger to the ETF business in the U.S.. In 2014 Source debuted
its first ETF in the U.S.
, with a mission to redefine the basic building blocks of portfolio construction
. Yet Source shuttered
that first U.S. ETF in 2015.
Neil Anderson, Managing Editor
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