People Moves

ETFS Capital’s push for WisdomTree board seat backed by activist investor

The group agreement firms collectively own 13.6% of WisdomTree's voting shares

Jamie Gordon

a man in a suit

ETF Stream’s parent company, ETFS Capital, has had its push to take a seat on the board of WisdomTree backed by activist investor Lion Point Capital.

In a previous 13D regulatory filing with the Securities and Exchange Commission (SEC) made in January, ETFS Capital chairman Graham Tuckwell (pictured) described what he saw as the underperformance of WisdomTree under the oversight of CEO Jonathan Steinberg and other members of the board.

The filing added WisdomTree had “been unwilling to date to work constructively” toward giving him a seat on the board since discussions began.

On March 8, however, a subsequent 13D filing disclosed fellow WisdomTree investor Lion Point Capital looked to support ETFS Capital’s efforts to take a seat on the issuer’s board.

The filing revealed ETFS Capital and Lion Point Capital had entered into a Group Agreement to “seek changes to the composition of the board and management” of WisdomTree, with the intention to “work constructively with the issuer to arrive at a solution that puts the issuer in the best position to unlock value for the benefit of all stockholders”.

ETFS Capital is WisdomTree’s largest shareholder with a 10.5% stake or 15,250,000 of the issuer’s voting shares and a further 14,250,000 of preferred stock, according to the filing.

This interest commenced when ETFS Capital – then known as ETF Securities – acquired a stake in WisdomTree via the sale of its European and North American asset management businesses in 2018.

Tuckwell was not allowed to seek management changes for three years as part of the deal.

WisdomTree shares were trading at $9 at the time of the acquisition on 11 April 2018 and briefly traded at $11.70 apiece the following month. The issuer is currently trading at $5.26 a share, as at 10 March.

Lion Point Capital has a 3.1% stake in WisdomTree through its 4,521,979 voting shares.

Though further discussions with WisdomTree are expected, the upcoming deadline for the issuer’s 2022 annual meeting means ETFS Capital and Lion Point Capital “reserve their right to take their case for board representation directly to the issuer’s stockholders”, the filing added.

ETFS Capital declined to comment.


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