Exchange Traded Product (ETP) Entrepreneurs to launch new independent platform "BOOST ETP"
Wednesday 31st October '12
Today sees the official launch of an exciting new entrant into the Exchange Traded Fund/Product market, BOOST ETP.
BOOST's founders and owners are Hector McNeil and Nik Bienkowski who have been in the European ETP market since its genesis. McNeil and Bienkowski were Managing Partners at ETF Securities (ETFS). They were instrumental in growing ETFS from $50 million of AUM to $22 billion when they left in September 2010 and October 2010 respectively. Both are still significant shareholders at ETFS, the world's leading Exchange Traded Commodities (ETC) provider.
The opportunity to launch one of only a few European independent ETP issuers has arisen from the significant changes currently affecting the ETP world. In a market dominated by large investment banks and diversified financial institutions significant questions are being asked about their respective ETP business models. Investors and regulators have been looking for more transparency around practices such as stock lending, collateral management and use of in-house hedging techniques. As a result innovation has slowed and is expected to slow further due to funding cuts, bank's requirements to reduce staff numbers and non-core assets. This has left a significant opportunity for an independent, nimble and focused player such as BOOST.
BOOST's origins and independence are very similar to the many successful ventures that have become a feature of the US ETP market which is divided between large fund management companies and many more specialised ETP providers. There are very few banks that have set up as ETP providers in the US, mainly because US regulations would not allow the European integrated bank provider model. Due to the potential for European regulators to follow the US model, BOOST plans to lead the way in the European ETP market, regardless of the outcome.
BOOST expects significant industry consolidation across the ETP sector and wants to position itself to take advantage of these opportunities as they arise.
Mr Bienkowski, Co-CEO, had this to say 'We are very excited to launch BOOST at this time. We feel that investors are ready for the dynamic product range we are about to bring to the market. Key to BOOST's uniqueness will be our product focus and independence. We want to deliver products investors want and need in an independent structure they can trust'.
Mr McNeil, Co-CEO, also commented, 'According to the ETFGI report, at the end of Q3 2012, the European ETP industry had 1,920 ETPs, but out of the 46 different providers only one independent ETP provider made it into the list of top 20 providers by assets. BOOST will add significant value to the European ETP market by bringing added value products delivered through a model free from conflicts of interest. Through the experience and dedication of our team we will bring a breath of fresh air to the market dominated by large, institutional and banking conglomerates.'
1Source: ETFGI European ETF and ETP industry insights report Q3 2012
BOOST's first ETPs will be launched on the London Stock Exchange.
Ed Gascoigne-Pees, Managing Director -
Louise Dolan, Managing Director - firstname.lastname@example.org
Phillippa Cantrill, Associate Vice President – email@example.com
BOOST will focus on a specialised product range which adds value to investors and the market. This is in direct contrast to the broad 'super market' offerings that the majority of incumbents provide; for example there are currently over twenty delta-1 Eurostoxx 50 ETPs available in Europe, with only a handful having significant assets.
BOOST's offering will target sophisticated investors including day traders, stock brokers, wealth managers, high frequency traders and institutional investment managers. By being specialised and focused, BOOST aims to be a market leader in their segment.
BOOST's main selling points include:
- Independent - BOOST is owned by its senior executives. BOOST's sole focus is to issue ETPs that clients want
- Best of breed - BOOST has conducted over 70 in-depth requests for proposal to world class service providers. Investors will be able to enjoy efficient products with liquidity, strong counterparty risk management and low costs for the product type. As a result, BOOST's structure should be among the most robust and transparent available to investors
- Innovative and nimble - BOOST will lead the sector in terms of innovation. This will be evidenced by the ETPs issued as well as the product development and market research behind the products
- Focussed and specialised - BOOST's strategy differs from the incumbent ETP issuers by not focusing on being everything to everybody
- Education - BOOST will focus on providing all the educational and thought leadership tools needed by investors
BOOST is well positioned to bring something new to the European market at both the ETP product range and investor service levels. The company will bring a fresh, investor centric, approach to all aspects to its operations including sales, marketing, research and product development.