ETF Securities Reportedly Mulling IPO

ETF Securities, the London-based ETF issuer with $28 billion in assets under management (AUM), is reportedly considering an IPO worth $1 billion. The firm has retained Citigroup and Bank of America Merrill Lynch to consider strategic options, including a share sale, the Wall Street Journal reported, citing sources with knowledge of the talks.

ETFs issued by ETF Securities made their debut in the U.S. in 2009 with the introduction of the ETFS Physical Silver Shares (NYSE: SIVR) and the ETF Physical Swiss Gold Shares (NYSE: SGOL). In March, the firm said it had $4 billion in AUM across seven U.S.-listed ETFs.

ETF Securities was founded by former banker Graham Tuckwell. Tuckwell launched the world's first gold exchange traded product in 2003, ahead of the 2005 debut of the SPDR Gold Shares (NYSE: GLD), which is now the world's second-largest ETF by assets.

Australian Tuckwell said his firm is cash flow positive and that the IPO is not necessary to raise cash, the Journal reported. The firm has seen its AUM quadruple from $7 billion at the start of 2009 due in part to the rising popularity of commodities ETFs.

Assuming a valuation of $1 billion, ETF Securities would have a market cap not far removed from WisdomTree (PK: WSDT), which sports a market value just under $783.5 million. WisdomTree had $12.1 billion in ETF AUM as of April 29, according to its Web site.

Other publicly traded ETF issuers listed in the U.S. include BlackRock (NYSE: BLK) and State Street (NYSE: STT), the two largest U.S. ETF issuers by assets, and Invesco (NYSE: IVZ), the parent company of PowerShares.

The Journal piece did not give a time frame for an ETF Securities listing nor did it say where the firm would list its shares. In the April 11 issue of Forbes, the magazine's “Investing” column mentioned ETF Securities as a possible IPO candidate in the “next year or two.”

ETF Securities also offers the ETFS Physical Palladium Shares (NYSE: PALL), the ETFS Physical Platinum Shares (NYSE: PPLT), the ETFS Physical Asian Gold Shares (NYSE: AGOL), the ETFS Physical Precious Metals Basket Shares (NYSE: GLTR) and the ETFS Physical White Metals Basket Shares (NYSE: WITE) to U.S. investors.