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Invesco Ltd. announced that it has entered into a definitive agreement to acquire Guggenheim Investments’ exchange-traded funds (ETF) business, which includes $36.7 billion of assets under management (as of Aug. 31, 2017)....


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Martin L. Flanagan, President and CEO of Invesco


The acquisition will bring a broad array of funds that expands Invesco’s active, passive and alternative capabilities, enhancing the firm’s ability to provide solutions that help clients achieve their investment objectives.

Under the terms of the agreement, Invesco would acquire Guggenheim Investments’ ETF business for $1.2 billion in cash.  The transaction will be funded using a combination of cash and debt.  The transaction is expected to close in the second quarter, pending necessary third-party approvals, including certain regulatory matters and requisite ETF board and ETF shareholder approvals.

The acquisition will complement Invesco’s market-leading ETFs capability and strengthen our ability to help meet the needs of institutional and retail clients in the US and across the globe, which will contribute further to the growth and long-term success of our business.  With the addition, Invesco’s ETF assets under management would total more than $196 billion globally (as of Aug. 31, 2017).  Specifically, we believe the acquisition will further:

 - Expand the depth, breadth and diversity of Invesco’s traditional and smart beta ETFs;

- Strengthen the competitiveness of our US Wealth Management Intermediaries business while providing additional scale and relevance in the growing ETF market globally;

- Broaden and deepen our relationships with client platforms;

- Accelerate our ability to offer an expanded range of ETFs to the institutional market;

- Build on our existing self-indexing capability; and

- Leverage the scale of our existing platform to create operational efficiencies (e.g., combined capital markets function for ETFs).

 “We’ve built and managed Invesco over many years with a single focus:  to help clients achieve their investment objectives,” said Martin L. Flanagan, president and CEO of Invesco.  “Guggenheim Investments’ ETF business is highly complementary to Invesco’s, and will enable us to provide one of the industry’s most comprehensive and innovative ranges of smart beta ETFs, including fixed income, equalweight and self-indexed product offerings.  The acquisition further expands our ability to build better, more diversified portfolios through our solutions capability, and enhances the range of capabilities available via Jemstep, our advisor-focused digital solution.  The addition enhances our ability to help meet client needs, which will help further accelerate the growth of our business.”

“This combination will further strengthen our market share and position by providing greater access to key channels and expanding the scale and relevance of our global ETF business,” added Dan Draper, global head of ETFs at Invesco.  “The addition builds on our existing self-indexing capability and brings the highly popular BulletShares® ETFs, both of which will further strengthen our ability to help clients achieve their investment objectives.”

 “Guggenheim Investments remains committed to delivering strong, risk-adjusted performance to clients by employing our rigorous and repeatable investment processes, as well as executing sound fundamental research and analysis,” said Jerry W. Miller, president of Guggenheim Investments. “With today’s announcement, Guggenheim Investments takes an important step in its growth strategy by sharpening its focus on core strengths, including active portfolio management, across both our institutional strategies and other retail businesses.  We are confident that Guggenheim ETF shareholders will find in Invesco the right partner and platform for our suite of distinctive and innovative ETF products, including one of the industry’s leading equal-weight ETF offerings.”

Citigroup Global Markets acted as financial advisor to Guggenheim Investments.

 

Source: ETFWorld

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