ETF Securities goes on sale for £1bn

Graham Tuckwell, one of the pioneers in the exchanged traded fund market, has put his company ETF Securities up for sale with a potential £1bn ($1.6bn) price tag.

Tuckwell, the founder, majority owner and chairman of ETF Securities, has mandated Goldman Sachs to run a sales process for the London- and Jersey-based group, two people close to the situation told the Financial Times.

It comes as the sector has been thrown into the spotlight by a recent trading scandal at UBS.

Tuckwell, the former Salomon Brothers investment banker, created the first gold ETF on the Australian Securities Exchange in April 2003 and launched the first ETF that tracked the price of oil two years later.

The Australian’s decision to sell the company comes as investors are piling more money into gold ETFs, which now hold 2,430 tonnes of the metal, more than most central banks, according to UBS.

Goldman Sachs recently sent out information to potential bidders, which include asset managers and private equity groups. The US investment bank has asked for unconditional offers to be submitted before Christmas.

The move comes as the fast-growing sector has come under tight scrutiny in the wake of the $2.3bn loss triggered by a trader at the ETF desk of Swiss bank UBS this year and as regulators fret about a lack of transparency in some of these products.

ETF Securities had $28.2bn under management at the start of December, of which $17.7bn, or 63%, was in physical precious metals products, according to the company’s website.

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Laura Miller
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