PowerShares Secures $10 Million Commitment from FTVentures
“Value Added” ETF Strategy Sets It Apart from Competitors
Four ETFs Have Attracted Over $500 Million in Assets in 17 Months
FTVentures is first Institutional Investor
Wheaton, IL – PowerShares Capital Management LLC, an asset management firm specializing in the development and management of Exchange Traded Funds (ETFs), today announced that it has received a $10 million commitment from FTVentures, a private equity firm that provides venture through late-stage growth capital to software and business services companies. FTVentures is the first institutional investor in the company. The financing will enable PowerShares, headquartered in Wheaton, Ill., to expand its unique series of funds, its national and international distribution strategy and its investment management team. The company currently offers four ETFs and plans to launch several additional funds over the next 12 months. PowerShares currently has over $500 million under management in four funds: Dynamic Market Portfolio and Dynamic OTC Portfolio, both launched in May 2003, and Mergent Equity Dividend Achiever and Golden Dragon Halter USX China, both launched in December 2004.
“PowerShares has all of the key attributes we look for when making an investment,” said Brad Bernstein, FTVentures Partner and new member of PowerShares’ Board of Directors. “It has a distinctive product offering, a strong management team and a market audience and demand that are exploding,” he explained. “ETFs are one of the fastest growing investments in the world today. Duke University’s Global Capital Markets Center estimates that ETFs will reach $1 to $2 trillion by 2010.”
Currently, there are just seven companies in the U.S. developing and managing ETFs, including PowerShares.
“What distinguishes this company from its larger competitors is its strategy of providing products based on value-added indexes, including the “Intellidex” indexes,” added Ben Cukier, FTVentures Principal, who joins Bernstein as a new member of PowerShares’ Board. Intellidex indexes are enhanced indexes developed by the American Stock Exchange.
“We believe that retail investors are seeking high quality alternatives to mutual funds which meet their investing needs. PowerShares are based on intelligent indexes designed to provide the performance and product efficiencies necessary to satisfy those needs,” said Bruce Bonds, CEO of PowerShares. “The intelligent index methodology is a sophisticated way of selecting index securities that have a greater potential for capital appreciation rather than only representation. The methodology is also designed to help control individual stock risk by ensuring sufficient exposure to several securities within a given industry, sector, style or capitalization, through continual pricing and liquidity and by ensuring access to investor assets during market hours,” he explained.
PowerShares Capital Management, LLC provides institutional caliber asset management and market exposure through the replication of enhanced indexes. PowerShares delivers this sophisticated asset management in one of the more benefit rich investment vehicles available today, the exchange traded fund. The firm is committed to theoretically sound portfolio construction and empirically verifiable investment management approaches. PowerShares’ asset management philosophy and investment discipline are deeply rooted in the application of intuitive factor analysis and model implementation to enhance investment decisions.
FTVentures is a private equity firm focused on software, business services and transaction processing companies. The firm provides venture capital as well as growth capital for build-outs, recapitalizations, and spinouts. FTVentures’ unmatched global financial services partner network-including 37 of the world’s leading financial institutions-provides the firm with a unique vantage point into the business-driven IT and operating challenges of the global enterprise. Founded in 1998, FTVentures currently has $623 million under management. The firm has offices in San Francisco and New York.
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