ARK Invest Has Acquired Rize ETF

This transaction marks a significant milestone in ARK Invest’s global expansion strategy and allows the firm to bring its suite of innovation-based active equity ETFs, under the UCITS framework, to investors across Europe, the United Kingdom, and new markets globally. The transaction allows ARK to establish a European UCITS suite of its ETF strategies along with the proven distribution excellence of Rize ETF. It also incorporates Rize ETF’s valuable and differentiated impact strategies to be distributed by ARK affiliates across our global footprint. We are planning to launch several of ARK’s actively-managed strategies in the European markets by the end of the year.

Rize ETF is a leading European innovator and respected provider of thematic and sustainable investing. As of August 31, 2023, Rize ETF managed $452m in AUM across 11 UCITS ETFs classified as SFDR Article 8 or 9, authorized in Dublin and marketed throughout Europe. Founded in 2019 by ETF industry veterans, Stuart Forbes, Rahul Bhushan, Jason Kennard and Anthony Martin, Rize ETF has become known across Europe for its innovative approach to building high quality, research-led and purpose-built thematic and sustainable index ETFs. Prior to Rize ETF, the Founders were integral to the building out of the European UCITS ETF business for ETF Securities, which was acquired by Legal & General in 2018. Their collective expertise covers the full lifecycle of ETF issuance from product strategy and index development to legal and regulatory, tax, portfolio management and operations, capital markets, research and marketing and distribution.

ARK has discerned Rize ETF’s outstanding position as a leader in European thematic and sustainable investing. Accordingly, this acquisition is a strategic move, designed to cater to European demand for ARK’s ETFs. At the heart of both ARK and Rize ETF lies a deep commitment to research. Rize ETF stands to benefit as ARK’s distinguished research in disruptive innovation augments and elevates Rize ETF’s existing capability to a level truly unique in the European ETF market which ensures that our enhanced platform can deliver an even more robust and future-ready investment research experience for European clients.

The current name and brand of Rize ETF will be phased out, as the platform transitions into “ARK Invest Europe,” a division of ARK Invest Limited LLC and the hub for ARK’s expansion into Europe, the UK, and new markets globally. On the ARK Invest Europe platform, existing Rize ETF index products will continue to be distributed but will take on the ‘ARK’ prefix instead of ‘Rize’ and feature ‘Index’ in their name to reflect their self-index-based nature. This transition advances our shared commitment to offer high-quality thematic investment solutions to a global investor audience across both the self-index and actively-managed formats. ARK Invest Europe will continue to uphold the high standards of investment research, portfolio management, and client service for which ARK is known, all while tapping into Rize ETF’s deep expertise in the European ETF market.

The timing was driven by recognizing our shared strengths and passion for innovation, the dynamic shifts in the investment landscape, and Europe’s growing appetite for active ETFs.

While ARK Invest Europe will be a division of ARK Invest Limited LLC, a separate legal entity under common control with ARK Invest’s US registered investment adviser, ARK will work to integrate Rize ETF and its employees fully into ARK’s existing corporate structure. The Rize ETF team will be focused primarily on growing the ARK Invest Europe operations.

ARK does not plan any changes in its management team, and we look forward to working with our new team members from Rize ETF.

The leadership of Rize ETF are committed to becoming key members of the ARK team and all ARK members are excited to welcome them. The Rize ETF founders, which have been instrumental in Rize ETF’s growth and success, will become integral members of ARK Invest Europe in order to maintain consistency and reliability for all existing and future investors.

ARK’s existing product offerings will expand as we plan to launch our active UCITS ETFs across Europe as soon as possible. ARK’s ETF strategies are centered uniquely on disruptive innovation and should stand out in the European market where few, if any, products of their caliber exist, especially in an ETF format. Given Europe’s growing appetite for active ETFs, introducing these distinctive funds to the continent will mark a notable step forward. We are eager and excited to become the benchmark for active ETF investing in Europe, and we will keep you updated on our product launch schedule.

The current suite of Rize ETFs, valued by investors for their focus on thematic and sustainable domains, will continue to be distributed but under the ‘ARK’ prefix instead of ‘Rize’ and feature ‘Index’ in their name to reflect their self-index-based nature. In addition, collectively we are exploring potential synergies between and among ARK’s existing ETF suite in the U.S. and Rize ETFs’ current product suite. Together, we intend to bolster research and deliver enhanced insights and value creation to our clients. 

ARK looks forward to offering its products to a larger audience, particularly European and UK investors who have not had access to our ETFs. Existing shareholders in ARK ETFs should not be impacted, except perhaps by the benefit of increased trading liquidity in our funds. 

ARK Invest’s acquisition of Rize ETF is strategic and aligned, as both firms share a common focus on the future and thematic investing. The expected synergies primarily revolve around combining ARK’s focus on disruptive innovation and expertise in active management of ETFs with Rize ETF’s experience in providing investment solutions that align with global megatrends. Together, we aim to create innovative investment products that cater to a broader range of investors.

This acquisition strongly aligns with ARK’s focus on disruptive innovation. ARK’s strategies are focused on technologically enabled disruptive innovation that will transform the existing world order. Rize ETF’s investment themes complement ARK’s existing strategies and should enhance our portfolio diversification. Rize ETF’s focus on sustainability also is forward-thinking in perspective.

Rize ETF created a range of ETFs focused on compelling megatrends, both thematic and sustainable, providing investors with the flexibility to benefit from the structural changes underway worldwide. Both Rize ETF and ARK are steadfast proponents of a transparent, research-driven investment methodology. This merger melds Rize ETF’s prowess in index-based thematic and sustainable investing with ARK’s deep-rooted research and actively managed portfolios focused on disruptive innovation. We anticipate that ARK’s research and insights will benefit Rize ETF’s European clients significantly, while emphasizing the need to position investment portfolios on the right side of technological change.

While Rize ETF has an established reputation in index replicating ETF strategies, ARK is celebrated for its active ETF prowess. Both approaches have distinct advantages, catering to diverse investor needs. As we embrace the expertise of ARK in active ETFs, our commitment to Rize ETF’s existing index suite will remain steadfast. This union synergises the strengths of both index and active ETFs.

The transaction will have no immediate impact on portfolio management of funds. Cathie Wood, assisted by APMs Dan White and Nick Grous, will continue to manage ARK’s active equity strategies. Will Scherer will continue to PM ARK’s US-listed index funds, and the transaction will not impact the existing management of the Rize ETFs at this time.

We expect our global assets under management to increase over time as ARK strategies are deployed across Europe/UK and the historic Rize ETF strategies continue their successful market penetration and distribution.

Yes, this is a merger of two highly innovative teams, and one of the key strategic benefits of that union is to leverage the unique skills and capabilities of ARK and Rize ETF to expand out ARK’s international product range.

Because this transaction is private, ARK will not be providing details on the deal.

We completed the acquisition on Tuesday September 19th.

Nikko will continue to distribute NikkoAM UCITs funds, and ARK will continue our support and collaboration with Nikko on these products. Similar to the US market, ARK offers its flagship ARK Disruptive Innovation strategy through multiple vehicles (for example, ETF, Mutual Fund, and Separately Managed Accounts) in an effort to be vehicle agnostic. Our clients choose the vehicles best for their particular situation and needs.