TCW Group to Acquire Engine No. 1’s ETF Business

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Asset management firm TCW Group announced on Tuesday its plans to acquire the exchange-traded-fund (ETF) business owned by activist investor Engine No. 1. The terms of the deal have not been disclosed.

The ETFs Included in the Acquisition

The acquisition will include three ETFs: the Transform Climate ETF (NETZ), Transform Supply Chain ETF (SUPP), and the Transform 500 ETF (VOTE), according to the announcement.

TCW’s Entry into the ETF Market

Todd Rosenbluth, VettaFi’s head of research, commented that TCW is one of the leading asset managers that currently only offers mutual funds and not their own ETFs. Despite joining the ETF market later than others, TCW’s strong brand with advisors can help them make significant progress.

Completion of the Acquisition

The acquisition is anticipated to be finalized in the third quarter, after receiving shareholder approval. TCW plans to integrate Engine No. 1’s ETF portfolio managers and staff into their firm.

Excitement Surrounding the Deal

Jennifer Grancio, chief executive officer and architect of Engine No. 1’s ETF business, expressed her enthusiasm about the acquisition, stating that they have built an impressive ETF business at Engine No. 1 and are excited to expand it further as part of TCW.

Combined Assets Under Management

The three acquired ETFs have a total combined assets under management of over $600 million. The Transform 500 ETF is the largest among them, with assets totaling $515 million as of July 24, according to FactSet data.

Performance of the Transform 500 ETF

The Transform 500 ETF has delivered strong performance this year, with a growth of approximately 20% based on Tuesday afternoon trading. The fund tracks an index of large-cap U.S. stocks and promotes transformative changes in companies through shareholder activism.

Read: Why Engine No. 1 has turned to ‘ex-hedge fund’ talent to expand active ETF lineup

Also see: ‘Closer to local design and demand’: Engine No. 1 launches Transform Supply Chain ETF in wake of COVID disruptions

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