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WisdomTree to buy ETF Securities’ European commodities business

Contract_handshakeUS exchange-traded product (ETP) provider WisdomTree is to buy the European exchange-traded commodity, currency and short-and-leveraged business of ETF Securities, a Jersey-headquartered provider of exchange-traded funds (ETFs) and products.

The New York-listed firm will pay $253 million (€217 million) in cash (of which $200 in newly-issued debt and $53 million of cash on hand) along with a stock consideration of 30 million WisdomTree shares in return for the business, bringing the total value of the deal to $611 million.

The sale will make ETF Securities the largest shareholder in WisdomTree, with a holding of around 18%. WisdomTree is currently the seventh-largest ETF provider in the US.

The business being sold to WisdomTree includes all of ETF Securities’ European operations excluding its ETF platform and makes up the bulk of ETF Securities’ European business.

The business being sold has $17.6 billion (€15 billion) of assets under management (AuM) spread across 307 products and more than 50 dedicated staff.

The sale, expected to close late in the first quarter of 2018 subject to regulatory approval, will bring WisdomTree’s total AuM to $66 billion and make it the ninth largest global ETP provider.

Graham Tuckwell, founder and chairman of ETF Securities, said: “ETF Securities has a strong cultural fit with WisdomTree as both firms have been built from scratch by teams who have worked closely together for many years and who show an entrepreneurial spirit in seeking to deliver innovative and market leading products for their customers.”

Last year ETF Securities became the largest-growing asset management firm in Europe, as a combination of ultra-low interest rates and geopolitical risk made gold particularly attractive.

In 2016, the company enjoyed the second-best year in its 12-year history with net inflows of $4.8 billion, of which 70% was into gold, and of which Europe accounted for $4.5 billion.

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