Investment management firm Invesco (IVZ 34.28) will soon be managing more assets that will enhance its market share in the ETF space. That understanding came to light after Thursday's close when Invesco announced it is going to acquire Guggenheim Investments' ETF business for $1.2 billion in cash.
Following the transaction, which will transfer $36.7 billion of ETF assets under management by Guggenheim Investments, Invesco will have more than $196 billion of ETF assets under its management on a global basis. BlackRock (BLK 446.11) is the largest provider of ETFs with more than $1 trillion of ETF assets under management.
The deal is expected to close in the second quarter, pending the necessary approvals.
Invesco sees the ETF asset purchase from Guggenheim Investments as a way to expand the footprint for its traditional and smart beta ETF offerings, broaden its relationship with client platforms, and build on its existing self-indexing capability among other things.
Guggenheim Investments, meanwhile, believes the divestiture will enable it to sharpen its focus on core strengths, including active portfolio management.
Invesco will hold a conference call at 8:30 a.m. ET today to discuss the acquisition.