BlackRock to acquire Claymore Investments

BlackRock, Inc. has struck a deal to buy exchange traded fund (ETF) provider Claymore Investments from Guggenheim Partners, LLC. BlackRock already owns the iShares line of ETFs, which manages the lion’s share of ETF assets in Canada.

“This transaction brings together two innovative investment fund providers and creates an unparalleled opportunity to serve our Canadian clients,” said Bill Chinery, head of BlackRock Canada. “Claymore Canada brings a complementary set of ETFs to the world-class iShares range of products and enhances our ability to compete against other investment fund providers in Canada.”

BlackRock’s iShares offerings account for nine of the top 10 ETFs by assets under management, with Claymore taking the ninth largest spot, according to year-end data from the Canadian ETF Association. The two companies account for 19 of the 25 largest ETFs.

In terms of market share, iShares accounted for 67.2% of the ETF market, with Claymore running a distant second, at 15.5%.

As of December 31, 2011, BlackRock offered 48 ETFs in Canada under the iShares brand, representing $29 billion in assets under management. Claymore Canada offered 34 ETFs and two closed-end funds representing $7.0 billion in AUM.

Bringing the two ETF lines under one banner makes sense, as there will be less duplication of product than one might expect from a mutual fund merger.

The iShares line held the rights to many of the most recognized indexes, including a plethora of cap-weighted S&P indexes. Claymore, on the other hand, focused on fundamental-weighted indexes.

“This combination of two great businesses will set a new standard for service delivery and product offerings in Canada,” said Mary Anne Wiley, head of iShares Canada, BlackRock. “Without question this will enhance our ability to deliver excellence in innovation, quality and choice—attributes for which our iShares brand is known around the globe.”

The transaction is expected to be completed by the end of the first quarter of 2012, pending regulatory approvals and satisfaction of customary closing conditions. Terms of the all cash transaction were not disclosed.

The ETF landscape is changing rapidly. Last year saw Jovian Capital sell its Horizons division to South Korea’s Mirae Asset Global Investments. RBC Global Asset Management launched its entrée into the field last year and U.S.-based giant Vanguard Investments has sailed into the Canadian market.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.