Ameriprise, Janus
New York Life may eventually introduce ETF versions of some of its mutual funds using IndexIQ’s expertise, Lawton said. He declined to discuss the terms of the IndexIQ deal, which is scheduled to be completed in the first half of next year. RBC Capital Markets is the banker for IndexIQ, which received legal advice from Paul Weiss Rifkind Wharton & Garrison LLP.
Asset managers including Ameriprise Financial Inc. have been diversifying beyond traditional stocks and bonds. The company’s Columbia Management announced an agreement last month to join with Blackstone Group LP to increase retail investors’ access to hedge fund strategies. Janus Capital Group Inc., the fund manager that hired Bill Gross, acquired VelocityShares LLC this year.
New York Life isn’t seeking to compete with larger ETF providers like BlackRock Inc. and State Street Corp., Lawton said. Those firms offer products that track indexes such as the S&P 500 and seek to distinguish themselves with low fees. State Street’s SPDR S&P 500 ETF Trust oversees about $200 billion and has an expense ratio of less than 0.10 percent.
“That’s really not our natural place,” Lawton said. “We’re creating more access to hedge funds, or hedge-fund-like vehicles, to a much broader population than probably has had access to them in the past.”