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Rating:A Fund Adoption Gives a $3.2B-AUM Acquirer a New Set of Targets Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, September 9, 2022

A Fund Adoption Gives a $3.2B-AUM Acquirer a New Set of Targets

Reported by Neil Anderson, Managing Editor

Watch for the team at a $3.2-billion-AUM mutual fund firm to extend their M&A push into another side of the asset management business in light of their upcoming acquisition.

Teresa Mariani "Terry" Nilsen
Hennessy Advisors, Inc.
President, Chief Operating Officer, Director
Terry Nilsen, president and chief operating officer of Hennessy Advisors, Inc. [profile], confirms that the folks at the Novato, California-based shop will be hunting for more deals in the ETF space after they bring on their first ETF later this year. (As previously reported, Hennessy has agreed to adopt the Stance Equity ESG Large Cap ETF, and the deal is expected to close in Q4, pending approvals from fund boards, fund shareholders, and the SEC.)

"That broadens our whole field of where we can look for strategic opportunities," Nilsen tells MFWire. "It gives us a whole other set of targets, and a whole other set of service providers and partners to network with ... We're excited to move into this space!"
In our traditional asset manager world, the shareholder comes first. Coupling that with sort of this great energy on the ETF side, that's fun and exciting. It reminds me of the early days of the mutual fund industry. People are excited to bring their products to market, excited to talk to investors ... Those are the things that make this fun!

"This is just one step ... We're hoping to identify more targets in the coming months," Nilsen adds, pointing to international strategies in particular as one area of strategic interest to the Hennessy team. "It's a good home. We really do take good care of our subadvisors and shareholders, and we have cash to deploy."

The Stance adoption will be Hennessy's 11th deal, and the ETF will be the 31st fund that Hennessy has brought on (for either adoption or a fund merger). It will boost Hennessy's total fund count to 17.

Nilsen also hints that the Hennessy team might launch more Stance Capital-powered funds down the line. (Stance's Bill Davis and Kyle Balkisoon PM the Stance ETF that Hennessy is preparing to adopt and plan to continue to do so after the fund is transformed into a Hennessy one when the deal closes.)

Davis, founder and managing director of Stance, reveals that the Stance team's next product will be outside the '40 Act space.

"We're in the process of launching a market-neutral ESG hedge fund," Davis tells MFWire, describing the strategy as geared towards investors "looking for modest returns and little correlation with equities."

"If we do anything else in the pooled space, we would certainly look to partner with Hennessy," Davis adds. 

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