ARK Invest, the U.S. firm founded by star portfolio manager Cathie Wood in 2014, has long had its sights set on entering Europe’s competitive exchange-traded funds (ETFs) market. Despite experiencing a decline from its peak of over $60 billion in February 2021, ARK Invest now oversees approximately $25 billion in assets. With a solid foundation and a loyal base of U.S. investors, ARK has shifted its focus towards achieving similar success in the European market. To aid in this endeavor, ARK recently acquired London-based Rize ETF.
Tom Staudt, ARK Invest’s Chief Operating Officer, expressed that the European market had been under consideration for some time. The acquisition of Rize, which manages around $450 million across 11 European ETFs, not only provides ARK with a foothold in the European market but also establishes a partnership with City veteran Martin Gilbert. Gilbert’s AssetCo business sold its majority stake in Rize, a company it acquired for £16.5 million in 2021.
Additionally, River and Mercantile, acquired by AssetCo last year, will leverage Rize’s platform to launch its own ETFs as part of the deal.
The acquisition of Rize by ARK was facilitated in just a few months, thanks to the introduction made by Michael O’Riordan, a founding partner of consultancy Blackwater Search & Advisory. O’Riordan emphasized that ARK’s decision to acquire an existing player in the ETF market, rather than starting from scratch in Europe, grants the firm instant access to local expertise and boots on the ground.
ARK Invest’s move into Europe’s ETF market marks an important step for the firm as it expands its global presence while leveraging its successful track record in the United States.
ARK Expands into Europe with Rize Acquisition
ARK Invest, the renowned investment management firm known for its innovative ETFs, is set to expand its presence in Europe through the acquisition of Rize. The move comes as part of ARK’s broader strategy to launch more products and pursue ambitious growth plans.
According to O’Riordan, this acquisition enables ARK to establish its own platform, which makes more sense given their wide range of products and future aspirations. For many U.S. managers looking to enter the European market, starting from scratch can be daunting. Access to an existing team from the outset is much more appealing.
Rize, founded in 2019 by a group of former Legal & General Investment Management professionals, will undergo a rebranding process and operate as ARK Invest Europe. This strategic move will provide Rize with the necessary firepower to expand its assets and establish a strong presence with key distributors.
O’Riordan emphasizes that being a smaller player in the ETF market often feels like facing a David versus Goliath scenario. However, having a reputable brand like ARK can be a game-changer and significantly elevate Rize’s position.
Staudt, a representative from ARK Invest, highlights that the expansion into Europe is a logical progression for the firm. Even without a formal presence or product on the continent, they currently receive around 25% of their engagement from continental Europe and the UK. This indicates a strong belief in unmet demand that ARK aims to serve.
Staudt also mentions successful partnerships outside the U.S., such as their collaboration with Nikko Asset Management in Japan. These achievements further strengthen ARK’s confidence in expanding beyond its home market.
For more details on this exciting development, please visit FNLondon.com
