Martin Gilbert’s Asset Co has been searching the wealth and asset management industry looking for opportunities to invest in companies.
In July 2021, it acquired a 63% stake in European exchange-traded fund (ETF) issuer Rize ETF from Irish financial services group Davy for £16.5m ($22.7m, €19.2m).
Asset Co is investing £5m is also committing a further investment of £5.25m to help fund Rize ETF’s growth.
International Adviser spoke to Rize ETF co-founders Stuart Forbes and Rahul Bhushan about the backing and the retail investment sector.
‘Turbocharge’
Forbes said: “Davy was going through a sales process and we were raising capital as a as a growing business, so it was a really good opportunity to find an investor that effectively would come in and give us everything we needed.
“We can turbocharge our growth with additional capital without any kind of conflicts of interest you might get from industry investors like a large asset manager.
“Getting the right investor was really difficult. We’ve been speaking to Asset Co for a few months now and what was so attractive about them for us was the fact that it is made up of proven entrepreneurs. They built Aberdeen from nothing. They’ve been there and done that in the asset management industry. They have the same sort of entrepreneurial mindset that we have.
“They’ve totally bought into our vision for the business.”
Forbes added that the £5.25m funding will help the firm “accelerate” its product launches and “invest more in people”.
“To build more products, you need more people and expand your team,” he said. “That doesn’t mean that we’re just going to start firing out millions and millions of products.
“Some of the products that we build take months and months to develop, and that will continue. We will now have more people helping us develop those products. Expect us to continue putting out quality products that we take our time to build. This just enhances all of that.”
Growth
Asset Co’s backing does not mean that Rize ETF will look to abandon their plans. The investment firm’s focus is Europe and that will not change.
Forbes: “We need to focus here. It’s our key market. We have to be careful to bite off more than we can chew. There’s a significant opportunity here in Europe.
“Our whole approach to sustainability and everything else is very much catering to the European market. The European market is not necessarily in exactly the same place with sustainability as the rest of the world, however I’d say Europe is certainly taking a lead in terms of its approach to everything sustainable, not just investing.”
Rize ETF co-founder Bhushan also spoke about the firm’s long-term ambitions.
“I think there’s going to be a lot of opportunities along the way and we’re probably going to jump at some, and we’re not going to jump at some,” Bhushan said. “But what is certain to us is an asset manager in five years’ time is going to look very different from what an asset manager five years ago looked like.
“If we can be an asset manager and educator, and if we can create a more accessible environment for people to start to invest, I think we’d be pretty happy with what we’ve accomplished.
“To just be seen as an as an asset manager would be a little boring, I think we certainly see ourselves as a little bit more than that.”
Education for DIY investors
Retail investor education is a big issue for the market.
More and more products are becoming available for investors who may not have the financial knowledge to know what they are investing into, and it means the industry needs to find out a way to improve education.
Bhushan added: “I don’t think we have the perfect answer. We try to do our best with our products. We have five funds at the moment and we’re trying to constantly push out content relating to the investment themes.
“Our food fund, for example, is investing across a number of different subcategories, from plant-based meals to sustainable packaging to vertical farming. We’ve put up pieces on all of these topics, just sharing our thoughts on the industry.
“They’re not talking necessarily about the investment strategy that’s embedded in our fund, they’re just general information. A lot of most of the time our funds aren’t even mentioned. We try to push out content that that is easily digestible, and which people can kind of read one or two pages, not complex research reports that you used to see in the past from banks which are 300 pages long.
“What we’re trying to do with our investing style is educate investors about the theme itself, and then secondly, talk about the investment strategy and why we believe our fund is the right approach or vehicle to access the growth in that theme.
“With the types of products we build, we are never able to skip past the education part because a lot of them are first to market.”
