New York Life Investment Management announced the signing of a definitive agreement to acquire IndexIQ, a firm specializing in liquid alternative exchange-traded funds.
New York Life’s MainStay Investments business will leverage the acquisition of IndexIQ to enter the exchange-traded fund (ETF) market “with dominant position in alternative ETFs,” the firm says, calling the acquisition its first entry into the ETF industry.
The combination of the two companies brings New York Life’s global asset management franchise and distribution platform together with IndexIQ’s ability to launch alternative ETF products. Upon closing of the transaction, IndexIQ’s services will be delivered through New York Life’s MainStay Investments platform, opening new capabilities to investors seeking exposure to alternative investments through ETFs. It will add $1.5 billion to MainStay’s $101 billion in assets under management, according to the firms.
“Our entry into the ETF space is a significant leap forward for New York Life Investment Management and offers remarkable opportunities all around,” says Drew Lawton, chief executive officer of New York Life Investment Management. “Retail and institutional investors are increasingly attracted to ETFs because they offer a cost-effective, transparent way to access investment opportunities across asset classes around the globe.”
Lawton says IndexIQ has established itself as an innovator in liquid alternative ETFs, adding that New York Life intends to leverage IndexIQ’s capabilities to become a leading provider of non-traditional ETF solutions to the investment markets.
Among its 12 fund offerings, IndexIQ offers the IQ Hedge Multi-Strategy Tracker ETF, which aims to replicate the risk-adjusted return characteristics of hedge funds using strategies that include long/short equity, global macro, market neutral, event-driven, fixed income arbitrage, emerging markets and other strategies commonly used by hedge fund managers. IndexIQ also offers ETF models and separately managed account services.