ARK Invest acquired European exchange-traded funds platform Rize ETF, in a move that will pave the way for Cathie Wood's firm to offer its strategies to European investors.
ARK Invest is the parent company of ARK Investment Management, the investment manager led by Wood. The firm runs about $25 billion in assets across ETFs and other products across the globe.
A spokesman for Rize ETF confirmed the acquisition and said it closed on Sept. 19.
The deal will pave the way for ARK to introduce its ETFs to investors across Europe, the U.K. and beyond under the Undertakings for the Collective Investment in Transferable Securities framework. It will also allow for the growth and expansion of Rize ETF's thematic products, an ARK news release said.
ARK will pay up to £5.25 million ($7 million) for a 70% stake in Rize ETF that was held by U.K. asset and wealth management acquisition firm AssetCo, according to a reuglatory filing. As part of the deal, ARK and AssetCo will partner to support the launch of new ETF products for AssetCo's active equity asset management unit, River and Mercantile. AssetCo agreed to take a majority stake in Rize ETF in July 2021.
ARK plans to launch several of its actively managed strategies in Europe by the end of the year, according to FAQs published on its website. The timing of the acquisition "was driven by recognizing our shared strengths and passion for innovation, the dynamic shifts in the investment landscape, and Europe's growing appetite for active ETFs," the FAQs said.
"Today's acquisition advances ARK Invest's commitment to offer high-quality thematic investment solutions to a global investor audience, particularly European investors who have not been able to access our products," Wood, founder, CIO, and CEO of ARK Invest, said in the release. "We believe that the European ETF market presents a strong growth opportunity as new and younger investors continue to gain access to ETFs via the growth of digital platforms, and as active ETFs increase market share by meeting the demand for innovative investment exposures."
Rize ETF was founded in 2019 and managed $452 million in assets across 11 ETFs as of Aug. 31. It specializes in thematic ETFs, with all of its products categorized as Article 8 or 9 under Europe's Sustainable Finance Disclosure Regulation.
The Rize ETF brand will be phased out, with the platform moved to become ARK Invest Europe, a division of ARK Invest Ltd. The European platform will be a hub for ARK's expansion into new markets, Europe and the U.K., and existing Rize ETF products will remain available.
"The acquisition offers ARK an entry into the European ETF market, capitalizing on our expertise and track record in building multiple European ETF businesses," Stuart Forbes, co-founder of Rize ETF, said in the release. "Leveraging ARK's global network and our expertise in European distribution, we aim to strengthen our collective global presence. This initiative signifies not just business growth, but a collaborative exchange of global asset management best practices, insights, and tactics."
Additional details about the deal will be released in the coming weeks, the release said.
