Major ETF player VanEck launched an ETF that will track publicly-traded private asset managers, including Blackstone, Brookfield, KKR and Apollo.
This vehicle, which will trade under the ticker GPZ, is the first U.S.-listed ETF to provide that type of exposure. It tracks the performance, before fees and expenses, of the MarketVector Alternative Asset Managers Index (MVAALTTR), a modified capitalization-weighted, float-adjusted index that includes alternative asset managers based in the U.S., Canada and Europe.
“I think the fund is likely to be well-received as the remarkable growth outlook for alternative investments is pretty well-known,” wrote T. Neil Bathon, managing partner of Fuse Research Network, in an email. “This ETF offers a neat way to participate without the restrictions or lockups of LPs or even interval funds.”
Both financial advisors and their clients have shown robust interest in alternative investments in recent years. This interest only intensified in recent months as volatility in the public markets has made investors more eager to diversify, recent research shows. However, most private market assets available to individual investors today still require a higher tolerance for risk and some level of illiquidity.
VanEck will only include companies in GPZ’s holdings if at least 75% of their revenue comes from private market activities. It will cap individual company weightings at 12% and scan for additional eligibility requirements relating to market caps and trading volumes.
“Volatility in the equity markets, the growing potential for rate cuts, and a number of other factors appear to be converging, creating a far more favorable environment for many private market managers to deploy the massive reserves of capital they have accrued,” said Brandon Rakszawski, vice president and director of product management with VanEck, in a statement. “That makes now a fascinating potential entry point for investing in the stocks of these firms themselves as they prepare to embark on a new cycle of deployment and growth.”
VanEck is no stranger to launching ETFs focusing on new market products. Last year, the asset manager was among the first to be approved for an Ethereum ETF.