Multiple stacks of coins

ETF Securities Is On The Block, FT Says

ETF Securities, the exchange-traded fund firm known for its heavy presence in the world of precious metals, is up for sale and has retained Goldman Sachs to solicit bids, according to a report in Financial Times.

ETF Securities, which has major offices in both London and New York, is said to be keen on fetching a price of 1 billion pounds, or around $1.6 billion, according to the FT report, which cited two people close to the plans.

The company, headed by Graham Tuckwell, had assets of $28.2 billion at the end of November. Almost two-thirds of that is in precious metals products, according to the company’s website. It has ETFs listed in the U.K., Australia and the United States. Its U.S.-based assets were almost $4 billion as of Dec. 2, according to data compiled by IndexUniverse.

The report of a possible sale of ETF Securities comes at a time of great macroeconomic uncertainty and heightened popularity in precious metals products. Investors are wracked by anxiety that many of the world’s currencies, including the dollar and the euro, are being devalued by central banks intent on stoking credit demand and economic growth by keeping interest rates low.

Gold has indeed loomed largely as a store of value given such fears of currency debasement, and gold ETFs are increasingly being turned to as an easy way to obtain exposure to the yellow metal.

The world’s biggest physical gold ETF, SPDR Gold Shares (NYSEArca:GLD), now has $72.88 billion in assets. It was briefly the world’s biggest ETF earlier this year, as Europe’s sovereign debt crisis sent global equities downward and sparked a new surge in interest in gold.

Tuckwell, a former investment banker at Salomon Brothers specializing in the mining sector in the Asia-Pacific region, helped the World Gold Council bring GLD to market in 2004, the article said.

ETF Securities has two U.S.-listed gold ETFs, the ETFS Physical Swiss Shares (NYSEArca:SGOL), which stores its bullion in Switzerland; and the ETFS Physical Asian Gold Shares (NYSEArca:AGOL), which vaults its ingots in Singapore.

As of Dec. 2, SGOL had assets of $1.88 billion, while AGOL had $78.3 million, according to data compiled by IndexUniverse.

A spokeswoman for ETF Securities in New York had no immediate comment on the possibility that the company was up for sale.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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