New York-based private equity firm Warburg Pincus, a leader in the development of financial services companies, recently announced the appointment of former iShares CEO Lee Kranefuss as executive in residence. According to the press release, Kranefuss will “work to help Warburg Pincus identify and evaluate investment opportunities in the areas of exchange-traded funds (ETFs), index investing and asset management”.
Kranefuss spearheaded the growth of iShares from its inception in 2000 to over $600 billion in assets by 2010. With ETFs on pace for record inflows this year, it’s clear that Warburg and Kranefuss recognize the enormous opportunities the industry presents. For a firm that counts several financial service providers emphasizing mutual funds among its portfolio of investments, it’s certainly noteworthy to see a shift in focus towards ETFs. As Kranefuss commented, “ETFs and passive investing are powerful investment tools globally, and continue to see long-term inflows. However this is a time of flux and opportunity in the ETF industry. The time is ripe to create a large-scale, global, and independent ETF provider that will provide the truly attractive and innovative product – and the support behind it – that ETF investors demand”.
On Wall Street, private equity firms are often referred to as “the smart money”. By bringing Kranefuss into the fold, it appears that Warburg is placing that smart money on Exchange Traded Funds. And as we’ve said for years at The ETF Store regarding ETFs – “invest with the smart money”.
