Targeting the U.S. Insti Market, Kranefuss Still Wants to Look at Good Acquisitions, Too
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Tuesday, November 04, 2014

Targeting the U.S. Insti Market, Kranefuss Still Wants to Look at Good Acquisitions, Too

Lee Kranefuss and his new ETF team are making a push in the U.S., and organic growth isn't the only kind of growth on the table.

Last month Source, of which iShares founder Kranefuss is executive chairman, crossed the Atlantic with its first ETF for the U.S..

"We're just setting up the U.S. business," Kranefuss tells MFWire. "We're very excited about entering the market."

Source's primary distribution, Kranefuss says, is institutional. The Source team is targeting hedge funds, pensions, and more, and he says the advisor channel "is "huge." You have to "let people know you're there," Kranefuss says.

"What really builds a business is having the resources on the ground and the long-term commitment. It's an educational process around what you bring to market," Kranefuss adds. "There's some thought behind it. That's time-consuming ... We're in the process of adding to that staff [in the U.S.]"

As for acquisitions, Kranefuss says the Source team is "absolutely" open to doing deals. Kranefuss joined private equity giant Warburg Pincus several years ago, and he joined Source as executive chairman when Warburg bought a majority stake in Source earlier this year.

"In this industry, there's about one trade globally a year," Kranefuss says, "I'd be stunned if I didn't see every book that comes ... You always want to look at good acquisitions."

Yet Kranefuss is not putting acquisitions front and center in his strategy.

"You always want to know that you have a path that you're happy with for organic growth, so you don't have to do deals you don't like," Kranefuss says. "That makes you a disciplined buyer of things you really like at a price you feel is fair."

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