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Monday, September 26, 2011

iShares' Founder Resurfaces

Reported by Hung Tran

Lee Kranefuss[see profile] who started the iShares ETF business and has since retired from iShares' parent, BlackRock[see profile], has resurfaced in a new venture. Together with Rory Tobin, former CEO of the international iShares business, Kranefuss has launched ETF Opportunity Partners, a London-based ETF shop.

During their time at iShares, assets under management grew from $2 billion in 2000 to $470 billion, accounting for nearly 50 percent of the global ETF marketplace, according to a company press release. Kranefuss and Tobin were instrumental in the development of critical mass in the ETF product category in North America, Europe, Asia and Latin America.

"While asset growth in the ETF industry has been tremendous, much more room exists to serve investors well through innovative ETF products and services. ETF Opportunity Partners has been set up to drive that change across the globe," Kranefuss stated.


LEE KRANEFUSS AND RORY TOBIN TO ESTABLISH ETF OPPORTUNITY PARTNERS

London, 26 September 2011 - Lee Kranefuss and Rory Tobin announced today the formation of ETF Opportunity Partners, a new firm that is focused on driving transformational opportunities in the rapidly expanding global Exchange-Traded Fund (ETF) industry.

The founding partners of the firm bring a wealth of ETF, asset management and capital markets experience to the venture. Both were instrumental in the development of iShares, the world's largest ETF provider. Lee Kranefuss is the former Global CEO of iShares, while Rory Tobin is the former CEO of the International iShares business.

During their time at iShares, assets under management grew from $2bn in 2000 to $470bn, accounting for nearly 50% of the global ETF marketplace. Kranefuss and Tobin were instrumental in the development of critical mass in the ETF product category in North America, Europe, Asia and Latin America.

ETF Opportunity Partners expects to pursue a number of organic and inorganic opportunities to drive continued change and innovation in the ETF industry.

Kranefuss said: "ETFs have been one of the most successful financial products of the past 50 years - bringing investors liquidity, diversification, low cost, and access to a wide range of asset classes around the world. While asset growth in the ETF industry has been tremendous, much more room exists to serve investors well through innovative ETF products and services. ETF Opportunity Partners has been set up to drive that change across the globe."

Tobin added: "The global ETF opportunity is even greater today than at any time in the past ten years. Across Europe, Asia, and Latin America, there are exciting opportunities to bring ETFs to more investors in more countries with quality investment products that serve their requirements. We believe the industry will see significant change as investors and regulators demand greater fiduciary alignment between ETF providers and the ultimate investor. Too often there has been a lack of transparency in products sold as ETFs, and we expect a reshaping of the regulations and the industry for the benefit of investors globally."

ETF Opportunity Partners is a passionate advocate of the value proposition offered to investors by the ETF product category. We believe that true ETFs have been a tremendous boon to investors, providing transparency, liquidity, diversification, and choice to millions of investors. ETFs have grown from less than $100 billion of assets globally in 2000 to more than $1,500 billion - saving investors more than $50 billion in fees and costs along the way.

ETF Opportunity Partners is a strong believer of the principles of transparency, liquidity, fiduciary standards and investor alignment as they apply to the ETF industry, and intends passionately to advocate these standards in its business model.

About Exchange-Traded Funds:

ETFs have been one of the most successful financial products over the last 25 years because of the tremendous value they provide to investors. Global assets under management (AUM) stands at approximately $1,500bn, and since 1995 the product category has generated consistently positive annual net flows through both up and down market cycles.

This growth is set to continue, with a recent McKinsey report predicting global ETF assets under management to increase to between $3,100bn and $4,700bn over the next five years.

ETF Opportunity Partners sees considerable opportunities in the Global ETF marketplace, and wishes to apply its knowledge, experience and track record to harnessing these opportunities.

The US market represents approximately $1,100bn in AUM, with 1,000 products provided by 29 providers on two stock exchanges.

The international marketplace, by contrast, is still in the early stages of development. International AUM is approximately $450bn, but significantly there are approximately 1,800 products offered by 117 providers across 47 stock exchanges. For a variety of reasons, current providers in the international market appear somewhat challenged in gathering new assets and growing the overall category. ETF Opportunity Partners intends to act as a catalyst to unlock these market opportunities.

About Lee Kranefuss:

Lee Kranefuss started the iShares ETF business, which is the largest ETF family globally, and currently has more than $500bn in assets under management. He retired from BlackRock, the current owner of iShares, in April 2010, and has been pursuing a range of investments in the asset management industry globally.

About Rory Tobin:

Rory Tobin was CEO of the International iShares business. In this role, Mr Tobin was responsible for leading and developing the iShares business outside the US (EMEA, Asia, Latin America), with particular focus on Europe. He retired from BlackRock, the current owner of iShares, in July 2010. 

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