Warburg Pincus Buys Stake In Source

February 24, 2014

In January, European exchange-traded product firm Source ETP gave up a majority stake in its business to global private equity firm Warburg Pincus as it looks to become a top-tier ETF provider.

The move, which also sees ETF guru Lee Kranefuss taking up the role of executive chairman, is expected to provide Source with the resources to develop and launch new products, and enhance existing products.

Source ETP’s business model currently includes five existing shareholders: BofA Merrill Lynch, Goldman Sachs, J.P. Morgan, Morgan Stanley and Nomura. However, the transaction will see Warburg Pincus hold the majority stake and the remaining shareholders continue as minority shareholders.

Kranefuss is currently an executive-in-residence at Warburg Pincus and will join Source as executive chairman. Kranefuss was formerly global chief executive officer at iShares and oversaw the global expansion of that company from launch in 2000 to managing more than $600 billion in assets in 2010.

Source has an open architecture and has forged partnerships with global companies such as Pimco, Man GLG and LGIM since its launch in April 2009. It ranks sixth in Europe for ETF assets under management.

The transaction is subject to regulatory approval.

 

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