Janus Capital Group has agreed to acquire VS Holdings Inc, the parent company of VelocityShares, a provider of institutionally-focused exchange-traded products (ETPs).
VelocityShares is focused on developing instruments that enable investors to manage risk.
The transaction includes an initial upfront cash consideration of USD30 million and is expected to close in the fourth quarter of 2014. Closing of the transaction is subject to certain conditions, including regulatory approval.
“This acquisition positions Janus within the rapidly growing rules-based and active ETF universe, enhancing the customised solutions we can provide to our clients and enabling us to work with the growing segment of financial advisors and institutions focused on these instruments,” says Richard M Weil, chief executive officer of Janus Capital Group. “Today’s announcement is a continuation of our strategy of intelligent diversification, adding new talent to support innovation and smart solutions for our clients. We are excited to have the VelocityShares team join our organisation, and we are confident their expertise and product innovation capabilities will be beneficial to our clients and shareholders.”
VelocityShares was founded in 2009 and is managed by Nick Cherney, Richard Hoge and Steve Quinn. The firm’s initial growth was driven by the development of exchange-traded notes (ETNs) in the volatility and commodity space. The company developed a market leading position in tactical trading products serving short-term investors and traders by focusing on helping clients develop sophisticated trading strategies and volatility management solutions. These products will continue to be distributed by the VelocityShares team through its existing distribution channels.
VelocityShares has more recently launched a second business around innovative and intelligent ETFs for diversified long-term investment portfolios, currently focused on volatility hedged equities and equal risk weighted solutions. These ETF offerings, along with future product innovation, offer significant synergies between VelocityShares and Janus. VelocityShares is headquartered in Darien, Connecticut and employs 11 professionals, many of whom are ETF industry veterans and have extensive product development, product structuring and sales experience. As of 30 September 2014, it has raised USD2 billion in assets.
“Janus’ global distribution network and commitment to product development creates very unique opportunities to deliver institutional quality ETFs to a wide range of investors,” says Nick Cherney, co-founder and chief investment officer of VelocityShares. “Our combined company will be well positioned to grow our ETP business and continue to be a leading provider in the market place.”