New asset manager tests adviser appetite for targeted ETFs

Gabriel Hammond's latest venture is setting its sights on private markets

ETF innovator Gabriel Hammond is back in the game with a new company and four new strategies for providing targeted asset exposure.

Hammond, who sold two previous ventures that involved pushing the creative limits of exchange-traded funds, has started Emles Advisors to manage funds focused on public and private markets.

The ETFs launching Wednesday include Emles Made in America (AMER), Emles Federal Contractors (FEDX), Emles @Home (LIV) and Emles Real Estate Credit (REC).

Even though three of the four debut funds target specific equity market themes, Hammond said the company “will focus pretty significantly on fixed income going forward.”

He said the new venture is the result of looking for “what to put the funds into” following the sale of Alerian Capital Management in 2018.

Prior to Alerian, Hammond founded SteelPathCapital, which he sold in 2012 after it made its mark by offering the industry’s first funds investing in master limited partnerships.

In addition to former Alerian chief investment officer Dave Saxena, Emles is populated with industry veterans, including Agam Sharma from PineBridge Investments, Emanuel Zareh from Bayfield Court Capital Management, Yevgeniry Shlkovskiy from Bank of America Merrill Lynch, and Rachel Deinhart from The Carlyle Group.

Even though Emles is brand new, Hammond is already describing it as the “bigger and more diversified brother of Alerian,” because Alerian was focused on a single asset class.

“This company I’m never going to sell,” he said. “I plan to use it as an infrastructure for our ideas over the next 60 years.”

In terms of uniqueness, Todd Rosenbluth, director of mutual fund and ETF research at CFRA, gave the new venture high marks.

“Most ETFs focus on where a company is domiciled and not from what country or what segment of the economy they derive their revenue from, making AMER and FEDX unique,” he said. “Following the election, we could see renewed interest in government spending and U.S.-centric companies that will comprise these new offerings. While the ETF space appears crowded, there’s still room for growth with thematic strategies offering exposure to a sub-segment of the market.”

Like any savvy producer of exchange-traded funds, Hammond acknowledges he is going directly after the financial adviser market, as the largest consumer of ETFs. “RIAs are the biggest segment, and these funds fit for someone looking for something different and a little more discerning in terms of risk and reward,” he said.

In terms of what else investors and advisers might expect to see from Emles, Hammond gave the nod toward private assets.

“We’re looking at a number of different pieces in the alternative credit space,” he said. “Private credit one of the fastest growing sectors and it’s really limited. We think it’s something that should be available to everybody.”