Recon Capital Builds ETF Launchpad

Recon Capital, the investment manager behind three ETFs, is now behind an ETF platform that’s designed to help other advisors, as well as hedge fund and investment managers bring exchange-traded funds to market.

The concept of an “ETF in a box” solution for asset managers isn’t new. For example, Exchange Traded Concepts is one of the firms that popularized the idea. The firm has helped launch 22 ETFs in the market so far from a dozen or so different managers.

Obtaining the necessary exemptive relief to launch ETFs from the Securities and Exchange Commission is a time-consuming and costly effort. It’s that high barrier to entry that’s the appeal of third-party platforms.

How Is Recon’s Platform Different?

Richard Keary, head of Global ETF Advisors and the consultant behind Recon’s efforts, said that the new platform will support ETFs that are complementary to Recon’s lineup of funds. The goal is to have Recon either co-brand, co-distribute, co-produce or, in other words, be a partner in these funds.

As a company, Recon Capital is “wrapper agnostic,” Keary told ETF.com. But the firm is keenly tuned in to the asset-growth opportunity the ETF space represents, and it has found that offering access to the in-house processes and infrastructure it built to support its proprietary ETFs was a good idea.

These partnerships with Recon, he says, should also help bring innovation about as asset managers collaborate.

The Target Clients

Since the goal of the platform is to forge partnerships, Recon is looking for “like-minded investment managers,” Keary said. The firm will also focus on partnerships with managers who have a “sustainable business model,” Keary added. “It’s all about synergies.”

The first fund to be offered through this platform is already in registration. The BullMark LatAm Select Leaders ETF is the result of a partnership between Recon and BullMark—a manager that has no presence in the U.S. yet but is active in Latin America.

How Long Do Clients Stay?

It’s often the case that investment managers use a third-party platform to get their start in the ETF space, but once a fund gets serious traction, many choose to go out on their own and pursue their own exemptive relief needed to launch ETFs.

Keary said the idea of partners leaving the platform once success hits is not a concern. “It would be a great situation,” he said. “We’d have incubated them, and going forward, we would still rely on each other in this business.”

Recon Capital is also the sponsor behind the Recon Capital Nasdaq 100 Covered Call (QYLD | C-58), the Recon Capital DAX Germany (DAX) and the Recon Capital FTSE 100 (UK).

Contact Cinthia Murphy at [email protected].