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AssetCo acquires 63% stake in Rize ETF for £16.5m

AssetCo has announced it will acquire a 63% stake in Europe’s first specialist thematic ETF, Rize ETF, for £16.5m.

Expecting to close on 27 July, 2021, the 63% AssetCo acquisition of Rize ETF, which has launched four thematic ETFs including Medical Cannabis and Life Sciences, will see a further investment of £5.25m to help fund the growth of the business.

Gordon Neilly, an adviser to AssetCo, and Gary Collins, Head of Distribution at AssetCo, will join the Rize ETF board.

A new approach to asset management

As well as medical cannabis, Rize ETF, which currently has $450m of assets under management and was recently named winner of “Best New ETF Entrant” in the ETF Express Awards 2021, specialises in Cybersecurity and Data Privacy, Educational Tech and Digital Learning, and Sustainable Future of Food. It is also anticipating the launch of four new thematic ETFs for 2021, including the launch of Environmental Impact 100 ETF later this month.

AssetCo will fund the £16.5m consideration from an equity financing by way of an accelerated bookbuild for approximately £25m.

Peter McKellar, Deputy Chairman and CEO of AssetCo, commented: “The team at Rize has built an impressive thematic ETF platform, based on an incredibly exciting ethos. It provides investors access to products that enable them to participate in new and relatable themes and benefit from strong growth led by secular trends.

The Rize approach to product development echoes one of the fundamental principles on which AssetCo’s strategy is based: that a new approach to asset management, unbridled by legacy constraints and ways of doing things, will drive significant growth, as technology led manufacturing and distribution of investment products tap into the new, emerging trends in the way the next generation of investors choose to allocate their capital.

Our strategy is to position AssetCo to take advantage of the structural shifts taking place within the asset and wealth management industry, such as the increasing use of technology to help individual investors and their advisers. Rize has the team, pedigree and expertise to grow significantly and to continue to deliver product innovation for investors, building a world class thematic ETF business in the process. 

“We are looking forward to working with the Rize ETF team in building the business and delivering value to investors and AssetCo’s shareholders.”

Management and employees will own an effective 37% equity interest in Rize ETF following the acquisition, of which 5% is subject to certain near-term performance conditions.

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