A subadviser to Grail aims to enter active-ETF market itself

In the wake of the announcement that Columbia Management Investment Advisers LLC will buy Grail Advisors LLC, one of Grail's partners is still making plans to go it alone with active ETFs
MAY 20, 2011
In the wake of the announcement that Columbia Management Investment Advisers LLC will buy Grail Advisors LLC, one of Grail's partners is still making plans to go it alone with active ETFs. RiverPark Advisors LLC, which advised two active ETFs for Grail, already filed for exemptive relief from the Securities and Exchange Commission early last year to launch its own active ETFs, said Morty Schaja, RiverPark's chief executive. “We wanted to be in control over our own destiny,” he said. Given Grail's decision to be acquired by Columbia — and get rid of its subadvisers — the move now looks fairly prudent. RiverPark wants to launch a small-cap-growth active ETF and a high-yield ETF, both similar to mutual funds it has, Mr. Schaja said. But given the market, RiverPark instead may decide to launch similar ETFs to what it has now with Grail, he said. Currently, RiverPark advises the Grail RP Growth ETF and the Grail RP Focused Large Cap Growth ETF, which have $18.2 million in combined assets. That's the majority of Grail's $23 million in assets under management. As reported by InvestmentNews April 15, RiverPark will be replaced by Columbia as the manager of these ETFs by the end of May. RiverPark will not launch sector-based actively managed ETFs like the Grail RP Financials and Grail RP Technology Ticker, which closed in August. “I no longer believe it makes sense to have sector-based active ETFs,” Mr. Schaja said. “People who are looking to buy ETFs within a sector are index players.” Still, Mr. Schaja has faith in active exchange-traded funds. “I still believe they make sense,” he said, “but we are going to tread slowly.” E-mail Jessica Toonkel at [email protected].

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