Last updated: 02:04 / Thursday, 10 September 2015
Smart Beta ETFs

OppenheimerFunds to Acquire VTL

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OppenheimerFunds to Acquire VTL
  • VTL manages $1.7 billion for investors across eight ETFs and its separate accounts
  • The acquisition expands the firm´s active client offering into the growing smart-beta space
  • OppenheimerFunds also acquired the firm SteelPath, in 2012

OppenheimerFunds has announced an agreement to acquire VTL Associates, an independent institutional investment firm best known for its RevenueShares exchange traded funds (ETFs). VTL manages $1.7 billion for investors across eight ETFs and its separate accounts.

The acquisition expands the firm´s active client offering into the growing smart-beta space, subject to customary closing conditions and consents. The deal will bring both high-quality smart-beta ETFs and an ETF platform offering cost- and tax-efficient investment solutions that financial advisors are increasingly using in their investors' portfolios.

"Investors are looking to active managers for innovative solutions to add to their overall investment strategy, including products that are designed to deliver better-than-market returns with full transparency of their investment process," said Art Steinmetz, Chairman, President and CEO of OppenheimerFunds.

In general, smart beta strives to identify factors that have the potential to generate positive risk-adjusted returns compared with market-cap-weighted index funds. VTL applies a proprietary methodology to screen and weight the stocks in each ETF according to various factors such as revenue or dividends, instead of by market capitalization. This practice is designed to lower exposure to overvalued companies, while maintaining diversification by investing in all of the stocks in the given index. VTL has been successfully employing this strategy in ETFs since 2008.

"Our firm has grown by serving the needs of investors seeking above-market returns delivered through a suite of custom index products and institutional advisory services," said Vince Lowry, Founder of VTL. 

Peter Mintzberg, Head of Corporate Strategy and Development at OppenheimerFunds, said, "Clients have expressed interest in OppenheimerFunds expanding its array of investment capabilities.  We are expediting that process with a strategic acquisition, as we did most recently in 2012 with SteelPath, which enabled clients and their investors to participate in the income and tax advantages afforded by master limited partnerships. We continue to look for these types of opportunities to further broaden our offering in a way that is consistent with our core investment approach."

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