A Midwestern ETF entrepreneur is off to a new venture, bringing on key leaders and investors, even as his prior startup passes a big milestone.
| Phil Sheldon Bak|
Detroit-based Phil Bak
confirmed the launch of a new startup: SecLenX
. (Think "securities lending," but shorter.) Michael Fonseca
co-founded the startup with Bak last month and serves as chief operating officer. Currently, they are in the process of looking for a CTO and one or two angel investors, Bak confirms.
Meanwhile, Bak confirmed that he will no longer be involved in the day-to-day of management of Exponential ETFs
, although he will remain an equity owner. From an operational standpoint, no other major changes have occurred, he says. A new CEO has not yet been revealed.
Bak stated that SecLenX will bring "better data, analytics and transparency to the Securities Finance industry." He told MFWire
, "Investors deserve more transparency to the economics and pricing that they're receiving and we're gonna be a big part of that."
Stay tuned in the coming months for more details surrounding the SecLenX kickoff. Bak says he expects to have a product out to market by December.
"We're building a few things in stealth mode. A few things close to the vest," Bak said. "We're pretty excited. From a big picture we see that the Sec-Len industry is on the cusp of real disruption and real changes and we wanted to be a part of that."
Bak sees a lot of changes and opportunities in the market, explaining that, "the entire capital market infrastructure is relying on technology built long ago. They see a lot of changes in the market."
Meanwhile, back in December of 2019, Charles Ragauss, managing director at CSAT Investment (dba Exponential ETFs) was promoted
to the then newly created position of COO. At the time, Bak hinted that the firm had "a couple of things in stealth mode" and that new services would be coming to market in 2020. We’ll be bringing more services to market in 2020."
Then, earlier this month, three-year-old Exponential ETFs surpassed $1 billion in AUM.
"We're very proud of achieving that number," Bak said. "The billion dollars were hard fought and hard earned."
Bak added that SecLenX "is a separate entity."
"I felt there was too good of an opportunity to pass off what we expect to be dramatic changes in the securities lending industry," Bak said.
Even though he is stepping down as Exponential ETFs' CEO, Bak said that "Both companies [Exponential ETFs and Capital Markets] are really primed for big growth."
SecLenX is Bak's second startup, with Exponential ETFs being his first.
"It’s really a night and day difference," Bak said. "Coming at it a second time around, we are very much more well prepared to meet the challenges. We learned a lot of hard lessons and a lot of good lessons as well that came from exponential."
"The ETF sub advisor business was the first step in what will be a lifelong journey to bring efficiencies to the capital markets. SecLenX is a continuation of that journey. I appreciate everyone here for allowing me to share the journey with you," Bak stated.
Bak is founder of Exponential ETFs from and was the CEO from 2016 to 2020. Prior to launching startups, he was a managing director of New York Stock Exchange for six year and a senior product manager at Rydex. He hosts the Phil Bak Podcast and is the author of two patents on ETF structures.
Bak's work with ETFs began as a ETF development specialist at XShares Advisors: Exchange Traded Fund product management, product development, business development, index development and product positioning.
Stay ahead of the news ... Sign up for our email alerts now