MutualFundWire.com: An ESG Activist Investor Finalizes His ETF Exit

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Tuesday, October 17, 2023

An ESG Activist Investor Finalizes His ETF Exit

An ESG-focused, activist hedge fundster in Northern California has officially exited the ETF business, as expected, and a 52-year-old, Southern California mutual fund firm has officially entered.

Jennifer Lisa Grancio
The TCW Group
Group Managing Director, Global Head of Wealth

Yesterday, Katie Koch, president and CEO of the TCW Group [profile], and Chris James, founder and chief investment officer of Engine No. 1, confirmed that Los Angeles-based TCW has closed on its planned acquisition of Engine No. 1's $682.48-million-AUM ETF business and infrastructure. The deal brings TCW the Engine No. 1 ETF team and the three Engine No. 1 ETFs: the $534.22-million-AUM Engine No. 1 Transform 500 ETF (VOTE), the $138.19-million-AUM Engine No. 1 Transform Climate ETF (NETZ), and the $10.07-million-AUM Engine No. 1 Transform Supply Chain ETF (SUPP). (Though $210-billion-AUM TCW has subadvised ETFs, these will be its first proprietary ETFs.)

James confirms Engine No. 1's ETF team is joining TCW as part of the deal. Indeed, when the deal was first unveiled back in July, the TCW team expected to bring aboard 11 Engine No. 1 folks, including Jennifer Grancio, CEO and architect of the ETF business.

In July, word was that Grancio would join TCW as global head of ETFs, but her role appears to have expanded at the acquirer. Koch confirms that Grancio will now serve as TCW's global head of wealth, a newly created role. That puts Grancio in charge of TCW's "brand and digital marketing strategy" as well as global wealth distribution, including TCW's ETF business, the TCW team explains.

Koch describes the Engine No. 1 deal as "an important part" of TCW's push to enhance capabilities and broaden its offerings.

"We are very excited to work with the exceptional people joining us from Engine No. 1 as we work to grow a world-class ETF platform at TCW," Koch states.

Grancio lauds TCW as "a best-in-class asset manager" with "a deep investment legacy and culture, as well as such significant growth potential."

"We see exceptional opportunity to advance the growth and innovation of the ETF platform, as well as deepen distribution of the entire range of TCW products across wealth channels," Grancio states.

At Engine No. 1, James notes that his team will continue to run their private capital business.

"We are tremendously grateful to the entire team moving to TCW and we look forward to their continued success as part of TCW," James states. "We are especially appreciate of the tireless work of Jennifer Grancio, a founding member of Engine No. 1 who helped build the business and make this sale possible."

Printed from: MFWire.com/story.asp?s=66569

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