AIM-listed AssetCo PLC has sold its 70% equity interest in sustainability-focused ETF specialist Rize to Cathie Wood's ARK Invest for up to £10.5 million.
AssetCo, the acquisitive fund management group led by Martin Gilbert, founder of Aberdeen Asset Management, will get an up-front payment of £2.625 million, with the deal including a deferred payment of another £2.625 million and an earn-out provision over five years capped at £5.25 million.
Wood's US$25 billion 'active ETF' manager has agreed to support the launch on the US$452 million Rize platform of a number of exchange-traded fund products for AssetCo's River & Mercantile arm.
European investors have so far not been able to access the company's products, including the ARK Innovation ETF, which famously enjoyed huge growth during the pandemic before tumbling back down last year to roughly where it started.
"We believe that the European ETF market presents a strong growth opportunity as new and younger investors continue to gain access to ETFs via the growth of digital platforms, and as active ETFs increase market share by meeting the demand for innovative investment exposures," said Wood, who is ARK's founder, chief investment officer and chief executive officer.
Gilbert said the AssetCo had "come to the view that the best way for Rize to achieve its [growth] ambition is to partner with an established global player".
Rize will become the "hub" for ARK's expansion into Europe, "leveraging Ark’s global network and the UK company's expertise in European distribution, we aim to strengthen our collective global presence".
At the end of August, Rize had 11 ETFs, all categorised as being compliant with European SFDR sustainability Articles 8 or 9, domiciled in Dublin and distributed throughout Europe.
Shares in AssetCo, which also said its 30% equity interest in October 2021 acquistion Parmenion Capital Partners had been independently valued at £75-90 million, rose by 6.58% to 40.50p in early trade.