WisdomTree Taps Into Europe With Purchase

January 31, 2014

WisdomTree pays $20 million for 75 percent stake in Boost ETP as it breaks into Europe.

[This article previously appeared on our sister site, Europe.ETF.com.]


WisdomTree has become the latest US-based exchange traded fund provider to break into the European ETF market acquiring a majority stake in UK-based provider Boost ETP.

Boost ETP, which offers leveraged and inverse exchange traded products, launched at the end of 2012 and has seen its assets rise to around $52 (€37.8) million during that time. WisdomTree will invest $20 million in the provider, which will be used as working capital to help build-out a local European platform.

The $20 million is worth about 38 percent of the total value of the company and will give WisdomTree a 75percent holding, while Boost ETP will retain the remaining 25 percent.

The move is the latest sign that US firms are breaking into the European ETP market, which is worth $400 billion. Vanguard arrived in May 2012 and is now ranked 11th in the region, while First Trust and PowerShares have also launched products in Europe.

Most recently Warburg Pincus took a majority stake in Source ETP, which will be spear headed by ex-iShares CEO Lee Kranefuss. He commented this week on how Europe is in need of a real competitor to take on iShares.

Boost ETP was set up by Hector McNeil and Nik Bienkowski, who are both ex-ETF Securities, and will continue to run the operations at Boost ETP and take on those for WisdomTree. They are named as co-CEOs of WisdomTree Europe.

A note from Boost said that WisdomTree intends to launch a select range of UCITS ETFs under the WisdomTree brand.

McNeil and Bienkowski jointly commented, “WisdomTree is precisely the kind of innovative, dynamic and entrepreneurial company we are excited to join - it is an ETF success story. We look forward to continuing to grow the BOOST ETP family under WisdomTree and we are pleased to lead the platform for WisdomTree’s European ETF plans.”

Jonathan Steinberg, CEO and president of WisdomTree, said, “As the second largest ETP market after the U.S., Europe is a strategically important market and is the next natural step given our stage of development. Europe will represent our most significant international effort to date, and we are pleased to enter this market with an accomplished team”

WisdomTree’s vice chairman, Bruce Lavine, added, “We believe Europe is poised for continued and significant ETF growth fuelled by constructive regulatory changes and growing customer appreciation of the benefits of the structure. For WisdomTree specifically, the demand for smart beta has never been stronger. The decision for us to expand in Europe is a natural one, and we look forward to working with Hector and Nik to provide clients with thoughtful local solutions.”

Earlier this month Boost ETP announced that trades done on its Interactive Investor platform would be free until 31 March, waiving the normal £10 charge per trade. It also received UK reporting funds status by HM Revenue & Customs this year.

WisdomTree, which has $33.7 billion in AUM, has been in the US market since June of 2006 and is the only publicly traded asset manager exclusively focused on the ETF industry. It has 61 ETFs across equities, fixed income, currency income and alternatives asset classes. It is the fifth largest ETF provider in the U.S. and the eighth largest globally.



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