The co-founder of the TAMP Placemark Investments
is striking out on his own, and he's looking for a few good ETF managed portfolio shops. Randy Bullard
left Placemark this July after 13 years primarily directing the firm's distribution, and he's starting the ETF Strategy Group
, an asset management shop that's partnering with private equity to buy several small ETF portfolios and ramp up their marketing and distribution.
ETF managed portfolios are a growing business that was discussed in a Morningstar report
earlier this year. Bullard's plan is to bring four or five small firms under the ETF Strategy Group umbrella, and let them operate independently but with the same distribution.
Bullard says he's looking for shops that have around $500 million to a couple billion in AUM, a strong track record, and positive cash flow, but lack distribution. He told MFWire
that there are many strong managers that have great products and track records, but are "stymied in their ability to really grow" because of weakness on the distribution and marketing team.
Bullard says that he's in serious conversation with two shops and hopes to be able to announce one or both buys by the end of the year. And he's still hunting for two or three more.
He told MFWire
that he has four PE companies that are committed to backing the venture, but he declined to name them. And once he's up and running, he says he's "likely" to make some sales and marketing hires, but said that his hiring will depend on the gaps in the acquired companies' personnel.
Noting that this is a "compelling growth segment for the asset management business," Bullard pointed to two similar efforts to expand ETF distribution: BlackRock
's Shares Connect
program, which links advisors and specialty ETF shops, and Charles Schwab
's 2010 acquisition of Windhaven
. Windhaven has grown quickly
since being teamed up with Schwab, and Bullard thinks that there are other shops that could replicate Windhaven's success when they're paired with improved distribution channels.
"There are several ETF managers with low-cost, very liquid products and killer track records, who lack the distribution and scale of operations to make them more successful," he said. He says that the ETF market has developed to the point where funds can be sold by their five- to ten-year track records, and that specialty ETFs' strong performance compared to traditional stylebox mutual funds during 2008 and 2009 is a further selling point.
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