Janus Capital Group has announced it has agreed to acquire VS Holdings Inc., the parent company of VelocityShares, LLC, a provider of institutionally-focused exchange-traded products (ETPs), including exchange-traded funds. VelocityShares is focused on developing instruments that enable investors to manage risk and has been delivering innovative products for a wide range of global investors since its launch in 2009.
The transaction includes an initial upfront cash consideration of $30 million and is expected to close in the fourth quarter of 2014. Closing of the transaction is subject to certain conditions, including regulatory approval.
“This acquisition positions Janus within the rapidly growing rules-based and active ETF universe, enhancing the customized solutions we can provide to our clients and enabling us to work with the growing segment of financial advisors and institutions focused on these instruments,” said Richard M. Weil, Chief Executive Officer of Janus Capital Group. “Today’s announcement is a continuation of our strategy of intelligent diversification, adding new talent to support innovation and smart solutions for our clients. We are excited to have the VelocityShares team join our organization, and we are confident their expertise and product innovation capabilities will be beneficial to our clients and shareholders.”
VelocityShares was founded in 2009 and is managed by Nick Cherney, Richard Hoge and Steve Quinn. VelocityShares’ initial growth was driven by the development of exchange-traded notes in the volatility and commodity space. The company quickly developed a market leading position in tactical trading products serving short-term investors and traders by focusing on helping clients develop sophisticated trading strategies and volatility management solutions. These productswill continue to be distributed by the VelocityShares team through its existing distribution channels.
VelocityShares has more recently leveraged its expertise to launch a second business around innovative and intelligent ETFs for diversified long-term investment portfolios, currently focused on volatility hedged equities and equal risk weighted solutions. These ETF offerings, along with future product innovation, offer significant synergies between VelocityShares and Janus.
VelocityShares is headquartered in Darien, Connecticut and employs 11 professionals, many of whom are ETF industry veterans and have extensive product development, product structuring and sales experience. As of September 30, 2014, it has raised $2 billion in assets.
“Janus’ global distribution network and commitment to product development creates very unique opportunities to deliver institutional quality ETFs to a wide range of investors,” said Nick Cherney, Co-Founder and Chief Investment Officer of VelocityShares. “Our combined company will be well positioned to grow our ETP business and continue to be a leading provider in the market place.”
Janus Capital Group Inc. was advised by Wells Fargo Securities LLC and Paul, Weiss, Rifkind, Wharton & Garrison LLP, and VS Holdings Inc. was advised by Freeman & Co. Securities LLC and Stoel Rives LLP.
Founded in 2009, VelocityShares is dedicated to providing sophisticated investors with unique solutions for portfolio and trading risk management. At the end of September 2014 VelocityShares had raised approximately $2 billion in assets across 21 investment products.
Janus Capital Group Inc. (JCG) is a global investment firm dedicated to delivering better outcomes for clients through differentiated investment solutions. It currently has a number of distinct investment groups, including equity and fixed income teams within Janus Capital Management LLC (Janus), as well as subsidiaries INTECH Investment Management LLC (INTECH) and Perkins Investment Management LLC (Perkins). At the end of June 2014, JCG managed approximately $177.7 billion in assets for shareholders, clients and institutions around the globe. Based in Denver, JCG also has offices in London, Milan, Munich, Singapore, Hong Kong, Tokyo, Melbourne, Paris, The Hague, Zurich, Frankfurt, Dubai and Taipei.