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Rating:Flanagan Makes a $25B AUM ETF Deal Across the Pond Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, April 28, 2017

Flanagan Makes a $25B AUM ETF Deal Across the Pond

News summary by MFWire's editors

Marty Flanagan 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 [profile], unveiled 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.

Barron's, Morningstar, and Pensions & Investments all covered the news.

Invesco is no stranger to the UK, and its PowerShares [profile] 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."

Andrew Schlossberg, 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. 

Edited by: Neil Anderson, Managing Editor

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