Will Barclays' iShares
ETF business end up in the hands of
a private equity firm? That's a likely scenario, according to
The Wall Street Journal
, noting that many of Barclays' rivals
in the ETF space are struggling and likely don't have sufficient
financial muscle to bid for the business.
An unnamed source told the Journal that a private equity firm working in tandem with a sovereign wealth fund is among the likeliest
buyers for iShares.
Barclays on Monday confirmed it is in talks to sell iShares (see
A "person familiar with the matter" told the Journal that there are "dozens" of interested parties, including private equity firms. Due to the size of the transaction, some think a sovereign-wealth fund might participate, too.
The Journal earlier reported that iShares could fetch around £4 billion, or around $5.6 billion. That would work out to 2.6 percent of
$215 billion in assets under management at the end of February.
As for Barclay's competitors in the ETF space, observers say those firms
are not likely to purchase the business. Vanguard and State Street Global
Advisors are much smaller than BGI. SSgA's parent, State Street Corp., may
find it hard to buy iShares, as it is facing billions of dollars in unrealized losses
on investment pools it runs. State Street's stock has fallen 70 percent in the past year.
Other firms whose names have surfaced as possible buyers include Northern Trust, which is in "relatively decent shape." However, the Chicago-based firm exited the ETF business last month (see The MFWire,
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