With $70M Secondary Stake Deal, ETF Securities Ltd. Poised for Growth

Millennium Technology Value Partners, the New York-based secondary shares investor, has led a consortium to buy a $70 million stake in ETF Securities Ltd., the UK-based provider of exchange traded products.

The deal puts the company in the position to conduct a later funding round and possibly poises it for later deals, peHUB has confirmed with multiple sources.

The $70 million stake does not involve a fresh injection of capital into ETF Securities, said one source who spoke with peHUB, but that the consortium may, as part of their broader strategy, provide future funding to ETF Securities Limited.

An announcement on the transaction is expected soon; the stake sellers were not publicized. The aggregate amount of capital raised to date by ETF Securities was also not revealed.

ETF Securities has a total of $27 billion in assets under management and has expanded in the U.S. as of late, recently reaching $4 billion in assets under management in the U.S. ETF Securities increased its assets under management by about $20 billion since 2009. The company has built out a variety of commodities-focused exchange traded products in Europe and launched an operation in the U.S. focusing on physical-backed precious metals products.

Millennium Technology Value Partners closed a $284 million second fund in 2010. Lately, the secondary market investor has seen a number of successful exits. Prior investments NetSpend and Green Dot, both tech-enabled payment services firms, went public in 2010 and PlaySpan, another secondary market investment for Millennium, was acquired earlier this year by Visa. The investment firm was founded by Blackstone veterans Sam Schwerin and Dan Burstein in 2000.