GAMCO Investors has signed a license agreement with Precidian Investments (Precidian) to support the launch by GAMCO of a family of ActiveShares actively-managed, semi-transparent exchange-traded funds (ETFs).
The Precidian model, subject to applicable regulatory approvals, would allow GAMCO to deliver actively-managed investment strategies in an ETF vehicle without disclosing holdings on a daily basis. Precidian is currently seeking approval for use of ActiveShares from the SEC.
“The ActiveShares℠ structure gives Gabelli Funds access to a new set of investors as the actively-managed ETF market grows,” says Mario J Gabelli, Chairman and CEO of GAMCO. “Our agreement with Precidian adds another tax-efficient structure for delivery of our strategies.”
“We are honoured to work with GAMCO Investors to provide an innovative investment solution in the form of an actively-managed, periodically-disclosed ETF,” says Precidian CEO Dan McCabe. “The ActiveShares℠ ETF structure not only provides clients with expanded vehicle options, but it also protects the integrity of the underlying portfolio serving the best interest of the investor.”
GAMCO joins JP Morgan Asset Management, Blackrock, Capital Research, ClearBridge, Royce and Nationwide in licensing Precidian’s intellectual property. Precidian’s ActiveShares℠ structure seeks to combine the most beneficial aspects and protections of the traditional mutual fund with the efficiencies and flexibilities of an ETF. The patented ETF structure seeks to provide asset managers with the ability to generate alpha without daily disclosure of their proprietary strategies while simultaneously creating significant improvements in tax efficiency, manager flexibility and lower operating costs.