Industry Updates

Rize ETF ‘materially behind plan’ as AssetCo writes down value

Acquisitions also helped losses hit £13.8m in the six months to the end of March

Theo Andrew

a man in a suit

AssetCo is writing down the value of Rize ETF by circa £5m and said the business remains “materially behind plan” in its latest set of half-year results.

The group, which took a majority stake in Rize ETF in July 2021, said the business’s thematic focus has been set back by the advent of the war in Ukraine and “subsequent market jitters”.

Rize ETF recorded net inflows of £16.6m over the six months to the end if March, taking its total assets under management (AUM) across its nine ETFs to £343m.

Martin Gilbert (pictured), chairman of AssetCo, said: “It has been encouraging to see net inflows into the Rize ETF business over the period, which bucks the general trend in conventional fund markets and points to the ongoing potential for this product set.

“That said, the business remains materially behind plan, its thematic focus having been set back by the advent of war in Ukraine and subsequent market jitters.

“We have therefore decided to take the prudent approach of writing down the holding value in our balance sheet by c.£5m to £12m.”

He added the firm sees “real potential in this business” but added progress has been “later and slower than we had hoped”.

Gilbert said Rize ETF has been lining up clients looking to top up their thematic allocations “once interest rates and inflation begin to normalise and larger allocations into thematic equities begin to return to a meaningful size”.

The issuer’s largest ETF, the Rize Sustainable Future of Food UCITS ETF (FOOD), accounts for roughly half of the business AUM, with assets of £171m.

AssetCo said Rize ETF has been working with “a number of key clients” to develop its next suite of sustainable thematic Article 9 ETFs.

Last month, Rize ETF unveiled a circular economy ETF, the Rize Circular Economy Enablers UCITS ETF (CYCL), offering exposure to companies that are contributing to the transition to a circular economy under the EU Taxonomy.

It comes as AssetCo losses hit almost £14m in the six months to the end of March, up from £2.6m last year, following the Rize ETF write down and acquisition costs of £14.7m.

Administration expenses hit £11.7m and re-structuring costs hit £3m as River and Mercantile and SVM Asset Management were included in the half-year results for the first time.

At the same time, revenue grew to £8.3m for the six months, up from £1.3m over the same period last year.

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