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The mutual life insurance company said Thursday
its asset management business, New York Life Investment
Management, was set to acquire Rye Brook, New York-based IndexIQ,
well known for its alternative investment strategies.
IndexIQ will become a part of New York Life's MainStay
Investments platform, adding $1.5 billion to MainStay's $101
billion in assets under management.
"We have been very interested observers of the ETF space for
quite some time," said Drew Lawton, chief executive officer of
New York Life Investment Management, in an interview.
The deal underscores the growing weight and popularity of the
rapidly expanding ETF market.
For those like New York Life, buying a firm with an existing
management team, industry relationships and the necessary
regulatory approvals to launch funds facilitates entry to the
market.
"We are excited not only about the products that are already in
the market, but also about the type of products yet to be
launched and what we can do with our existing investment
management," Lawton said.
The deal follows an earlier Reuters report that Goldman Sachs
Group was in talks to acquire IndexIQ.
IndexIQ, which has 12 funds including its well-known IQ Hedge
Multi-Strategy Tracker ETF, has been focused on so-called liquid
alternatives strategies.
"We definitely want to own that space," said Adam Patti, chief
executive officer and founder of IndexIQ, noting he sees room
for further product development.
"I think we're still in the early innings in the ETF market, and
there's a ton of white space out there" for new ETF launches, he
said.
For IndexIQ, the deal will expand its distribution footprint to
retail and institutional investors on New York Life's platform.
The transaction is expected to close in the first half of 2015,
the company said. The terms of the deal were not disclosed.
(Editing by Jonathan Oatis and Bernadette Baum)
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