Guggenheim Officially Preps an ETF Unit Sale
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Monday, November 21, 2011

Guggenheim Officially Preps an ETF Unit Sale

The Canadian arm of Claymore is officially on the block, but the former Claymore business in the U.S. is not, at least for now.

Last week reports emerged that Guggenheim Partners [see profile] was putting its $6.8-billion-AUM Canadian exchange-traded mutual fund business, still branded on Claymore, on the block [see, 11/18/2011], and now Guggenheim and Claymore have both confirmed the sale, with JPMorgan and Royal Bank of Canada (RBC) advising.

Bloomberg and the Toronto Globe and Mail both ran updates on the sale.

Guggenheim bought Claymore two years ago, then later rebranded the U.S. Claymore business (and eventually most of the Rydex offerings, too) with the Guggenheim moniker. According to Bloomberg, Guggenheim officials said the firm "remains committed to the U.S. ETF market."

In Canada, Claymore boasts 16 percent of the ETF market, behind only BlackRock's iShares. In the U.S. Guggenheim's $12.9 billion in ETFs put it at number eight.

So why is Guggenheim selling the Canadian piece?

"We couldn't be more pleased with our partnership with Som [Som Seif, CEO of Claymore in Canada] and his team and remain confident in the company's growth prospects," Guggenheim told Bloomberg and the Globe and Mail. "The opportunistic decision to review strategic alternatives reflects the tremendous value created in a short time."

In an interview with the Globe and Mail, Seif added that Claymore's philosophy "is not changing in any way," and spokespeople for both sides claimed that a sale is only possibility under consideration. They declined to comment to the paper on pricing and timing.

So who might buy Claymore in Canada? Prior to the confirmation from Claymore and Guggenheim of the sale possibility, the Globe and Mail pointed to Invesco's PowerShares ETF arm and Bank of Montreal, as well as RBC, as possible bidders.

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