Another publicly-traded mutual fund shop is getting into the ETF game.

Yesterday Virtus Investment Partners [profile] president and CEO George Aylward confirmed that the Hartford, Connecticut-based subadvised mutual fund shop is buying a majority stake in New York City-based ETF platform startup ETF Issuer Solutions.

Pricing and terms of the deal were not disclosed. The deal is slated to close in March. Though no investment banks or deal consultants have yet been identified as working on either side of the deal, Paul, Weiss, Rifkind, Wharton & Garrison provided Virtus with legal advice on the deal. Haynes & Boones provided the same services, to ETFis.

Virtus points to ETFis co-founders Matt Brown, head of operations and technology, and William Smalley, head of product strategy and management. The fund shop does not specify what roles (if any) the duo or the rest of the ETFis team will take on once the deal closes. Yet Virtus does reveal that ETFis "will become a Virtus affiliate and continue to operate as a multi-manager ETF platform."

ETFis launched in 2012, and its first fully-ETFis-powered ETF, the InfraCap MLP ETF subadvised by Infrastructure Capital Advisors, went online in October 2014. At the time Brown, ETFis' CEO, told MFWire that ETFis had 12 more funds from 8 or 9 different managers in registration, in the pipeline. The ETFis vision is to help ETF startups get into the business.

"The ETFis business model is similar to the Virtus approach of offering investors access to strategies of boutique managers," Aylward states. "This partnership with ETFis will expand our product capabilities and allow us to offer compelling investment strategies in an actively managed ETF format."

Next up in the ETFis pipeline: the Newfleet Multi-Sector Unconstrained Bond ETF, to be powered by Newfleet Asset Management and currently in registration with the SEC. 

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