Leverage Shares details new white label offering
Leverage Shares' commercial director, Raj Sheth, spoke to ETF Express about the firm's new white label offering.
* What is the driver for Leverage Shares’ new white labelling offering?
- ETPs as a structure are efficient, easier to distribute across Europe/UK, raise AUM from various investor types and offers a lot of flexibility especially for PMs running strategies. However, the cost and logistics of making it happen means that only the largest AM’s or specialist firms can actually create them…. until now. LS is using its economies of scale, existing platform expertise to enable even mid-size fund managers to now have their own ETP
- The driver will hence be time to market (~three months), lower costs than what’s available today by >70 per cent and more certainty.
* What types of ETPs do Leverage Shares expect to launch?
- This offer would appeal to fund managers who have a good performance and strategy but lack the resources/funds/team to be able to expand their reach by creating their own ETP.
- So it should appeal to those who have good performance and wish to expand and attract AUM. Also it should appeal to those wishing to launch a more active strategy, seeking the best structure that enables them to grow across regions and attract investors of all stripes i.e. professional, wealth and some retail.
* How exactly will the offering work?
- Once LS and the partner have agreement on the framework of the fund, strategy, scope of delivery and commercial partnership, then it is LS which takes over all responsibility for regulatory approvals, documentation, joint seeding, listing, getting onboard the market maker, joint seeding, initial PR, platform onboarding and market outreach. LS continues to maintain regulatory reporting, documentation, broker relations, data push, etc
- Partner continues to run their strategy as normal and as agreed with LS. They will be the primary owner of the strategy and face to explain the strategy to investors keen to get under the hood. There is alignment between Partner and LS to grow AUM and the strategy with clear responsibilities agreed.
* Does Leverage Shares offer distribution along with the launching facility?
- Distribution is a wide range of activities, so best to say LS activity would be limited and realistic.
- LS already has 183 ETPs listed, investors/ market vendors who recognise this brand so the strategy owner directly benefits from our ongoing business. This can include - PR across key markets, broker onboarding, webinars, online marketing, event participation, LS colleagues based in few key European markets, etc.
- However, on the ground dedicated sales persons are expensive and overkill for a manager having one to two ETPs. Further, incoming queries would be redirected to the fund manager, who will own talking through their strategy and hence getting institution AUM.
* Will the offering be extended to the US?
- The first client is US based, Kronos (KRON). The offer remains for the moment as listing on LSE and/ or Europe but the strategy owner/ fund can be based in the US.