Ameriprise set to buy Grail Advisors: Sources

It's been a busy few days for Ameriprise Financial. Earlier this week, the firm, along with subsidiary Securities America, lined up an agreement with lawyers representing investors who got burned in Reg D offerings. And today, it appears the company is on the verge of acquiring Grail -- and moving into the actively-managed ETF space.

Ameriprise Financial Inc. is close to purchasing Grail Advisors LLC, according to people familiar with the situation. Those sources also said an announcement of the deal is imminent.
Grail first disclosed news of a potential sale in a Jan. 5 filing with the Securities and Exchange Commission. In a January 6 interview with InvestmentNews, William M. Thomas, Grail’s chief executive said the San Francisco-based provider of active exchange-traded funds was in talks with a “well known firm in the money management space that is just as excited about the active ETF space as we are.” He declined to name the firm, but did say it wasn’t a firm that currently does business with Grail.
Terms of the deal couldn’t be determined by press time. Mr. Thomas didn’t immediately return a call and e-mail. Benjamin Pratt, a spokesman for Ameriprise, didn’t return a call immediately.
Grail, which launched its first actively managed ETF in May 2009, has had a tough time gaining assets. In August, Grail closed two of its exchange-traded funds: the Grail RP Financials (RFF) and Grail RP Technology (RPQ). The funds, which were launched in September 2009, were managed by RiverPark Capital and had $2.5 million in assets each. Grail currently has five funds with a total of more than $20 million in assets.
For Ameriprise, a Grail acquisition would enable the company to plant its flag in the actively managed ETF space, which is fast-gaining in popularity. Meanwhile, the company continues to battle on another front. Earlier this week, Ameriprise and its subsidiary, Securities America, reached an agreement with attorneys representing investors who were burned by Reg D offerings that flamed out. According to an internal e-mail sent by Securities America, the agreeement is slated to be submitted to a federal judge within a week. The court must approve the deal before it’s final.