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Rating:For Deal 14, AXS Buys In Colorado Not Rated 5.0 Email Routing List Email & Route  Print Print
Tuesday, October 10, 2023

For Deal 14, AXS Buys In Colorado

Reported by Neil Anderson, Managing Editor

Greg Bassuk and his team are preparing to make their 14th acquisition, this time in Colorado. The New York City-area shop's latest deal will include one fund adoption and one fund merger.

On October 4, Bassuk, CEO of AXS Investments [profile], confirmed that they have agreed to acquire Knowledge Leaders Capital [profile]. Denver-based had about $184 million in AUM as of December 31, 2022, while Port Chester, New York-based AXS has $1.552 billion in AUM according to its March 2023 form ADV.

The deal is expected to close by the end of 2023, Bassuk confirms, and no investment banks were involved. Pricing and terms have not been disclosed.

Steve Vannelli, CEO and chief investment officer of KLC, will join AXS as a PM, Bassuk confirms. Bassuk declined to comment on how many KLC staff are expected to join AXS, but the AXS team confirms that "key members of the KLC team will be joining AXS in senior roles." Per KLC's form ADV filed in March 2023, it has a seven-person team, not including clerical staff. Vannelli is listed as KLC's principal owner.

KLC offers two funds: the $122-million-AUM Knowledge Leaders Developed World ETF (KLDW) and the $35-million-AUM KL Allocation Fund, both of which are PMed by Vannelli. AXS plans to merge the KL Allocation fund into the existing, $56-million-AUM AXS Astoria Inflation Sensitive ETF (PPI). As for KLDW, watch for AXS to adopt the ETF while keeping Vannelli on as its PM.

"KLDW ... will remain intact, and the strategy will remain the same," Bassuk tells MFWire via email. "The KLC ... team will join AXS in the AXS New York headquarters. AXS will not maintain a Denver office."

Bassuk puts the KLC deal in the context of AXS's efforts to bring "first-of-their-kind and other distinctly unique investment strategies to individuals and financial advisors."

"KLC is the firm that first identified 'the Knowledge Effect' — the tendency of highly innovative companies to generate excess returns in the stock market — and created the first investment methodology designed to capture those excess returns," Bassuk writes. "Thus, as a first-of-its-kind strategy, with a strong track record, the funds are a strong complement to the AXS existing funds lineup."

Vannelli describes KLC and AXS as "closely aligned ... on topics like improving investor access to unique strategies and a focus on innovation."

"We have long recognized the AXS track record of leadership and success in the ETF space, its differentiated approach to fund marketing and distribution, and its aggressive growth plans," Vannelli states. "It's an exciting time in asset management, particularly in ETFs, and we are thrilled to be joining AXS on its continued journey to innovate as a game changer in the ETF space and beyond."

Vannelli, a University of Denver alumnus who led equities at Alexander Capital Management, founded Denver-based Gavekal Capital, LLC in 2006 as an American subsidiary of Hong Kong-based Gavekal. Also in 2006, Vannelli created his first "Knowledge Leaders" models. Gavekal Capital launched its first U.S. mutual fund, the aforementioned KL Allocation Fund, in 2010, then debuted KLDW in 2015. Vannelli spun Gavekal Capital out of its parent in 2016, then rebranded Gavekal as KLC in 2017. 

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