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Rating:A $1.3B-AUM Alts Shop Adopts Into the ETF Biz, And ... Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, September 14, 2023

A $1.3B-AUM Alts Shop Adopts Into the ETF Biz, And ...

Reported by Neil Anderson, Managing Editor

A 24-year-old, $1.3-billion-AUM, global multi-strategy alternative asset manager is entering the ETF space via a pair of adoptions. The deal also brings a familiar new chief aboard and means that the ETFs' prior fund firm is winding down.

Vincent Michael "Vince" Lorusso
Clough Capital Partners, L.P.
CEO, President, Portfolio Manager
On August 30, Chuck Clough, founder of Clough Capital Partners L.P. [profile], and Vince Lorusso, co-founder and portfolio manager at Changebridge Capital, LLC [profile], revealed that Clough Capital is adopting Changebridge's $11.18-million-AUM pair of ETFs and that Lorusso is taking over as president and CEO of Clough Capital. A spokesperson for Clough Capital confirms that Clough will remain the principal owner (and chairman and chief investment officer) for his eponymous firm, while Lorusso is now one of the firm's shareholders, too. The adopting firm now has a team of 13.

"Changebridge will effectively cease to exist since the advisory agreements for the two Funds (Changebridge's only two advisory products) are now with Clough Capital and since Vince has joined Clough Capital as a full-time employee," the spokesperson tells MFWire via email.

Lorusso rejoined Clough Capital in his new role on August 29, the same day that the firm took over as investment advisor to Changebridge's two ETFs. Yesterday, the $6.09-million-AUM Changebridge Select Equity ETF (CBSE on the NYSE Arca, Inc.) and the $5.09-million-AUM Changebridge Long/Short Equity ETF (CBLS) transformed, respectively, into the Clough Select Equity ETF and the Clough Long/Short Equity ETF. Both funds kept their tickers and remain series of Listed Funds Trust.

"The addition of actively managed ETFs under Lorusso's leadership is a natural extension of the client-centric approach we've always taken towards product development and expanding our research capabilities," Clough states.

"Clough already managed closed-end funds, separately managed accounts and hedge funds. The firm's efforts have always been centered around its fundamental research capabilities," Lorusso tells MFWire via email. "The addition of active ETFs to Clough's existing offerings was a natural extension of a long-held desire to simply meet clients wherever they are, in whichever structure is most suitable for a given investment strategy. CBSE and CBLS incorporate strategies that are well-suited to take advantage of the liquidity, transparency, and tax efficiency of the ETF structure."

Before Changebridge, Lorusso spent 16 years with Clough Capital, rising to partner. That "long history with the firm" and Lorusso and Clough's "mutual confidence in each other's ability," Lorusso explains, allowed him to "step back into the Firm in a leadership capacity, continue to manage the ETFs ... and ... tap into the professional team at Clough Capital across operations, compliance, distribution, and research to help grow the ETFs." He notes that the deal comes shortly before the two ETFs will reach their third anniversary (a distribution milestone that can be key for advisors, consultants, and platform to consider using new active strategies).

"The ETFs will have a 3-year track record this November, now united with a Clough team that has ~20 years of experience with '40 Act products," Lorusso writes.

Lorusso's return to Clough Capital comes after Clough himself had been serving as interim president and CEO since to the departure earlier this year of then-CEO Mike Hearle, a spokesperson for Clough Capital confirms. Lorusso remains based in Charleston, South Carolina, though the spokesperson confirms that Lorusso will commute to Clough Capital's hometown of Boston, Massachusetts.

Clough Capital now serves as investment advisor to CBLS and CBSE, and Lorusso remains their PM. CBSE comes with an expense ratio of 85 basis points, while CBLS' expense ratio is 249bps. The two funds first debuted on November 13, 2020.

"The expense ratios are expected to remain the same, but this will continue to be an area of consideration for the Board of Trustees," the spokesperson writes.

CBLS and CBSE's other service providers include: Cohen & Company, Ltd. as independent accounting firm; Morgan, Lewis & Bockius LLP as counsel; U.S. Bancorp Fund Services, LLC (dba U.S. Bank Global Fund Services) as administrator and transfer agent; U.S. Bank National Assocation as custodian; and Vigilant Distributors as distributor and principal underwriter.

"With the integration into Clough, Vince retains PM responsibilities for the two ETFs, maintains service provider relationships, and can leverage the infrastructure of dedicated professionals already employed by Clough," the spokesperson writes.

Stay tuned for potential future Clough Capital expansion in the ETF space.

"The focus of the firm is on its investment management responsibilities, operations, compliance, and client service, but the team would be interested in continuing to explore avenues for growth in the industry, and specifically within the ETF space," Lorusso writes. "This interest assumes that the investment opportunities presented were both compelling and complementary to the team's capability set."

Lorusso leaves the door open to future Clough Capital expansion through strategic acquisitions or adoptions, at least down the line.

"It's possible, but we're focused on integrating the current funds into the Clough ecosystem," Lorusso writes.

Lorusso co-founded Changebridge in 2020 after working as a PM at Clough Capital. Earlier, he was a project manager and investment consultant at Natixis and affiliates. He is an alumnus twice over of Boston College. 

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