Alerian will get additional resources from Aretex to grow index business

Aretex Capital Partners (Aretex), a global private equity firm, has entered into a definitive agreement to acquire Alerian, a provider of energy infrastructure indices and market intelligence based in Dallas, Texas. The terms of the transaction were not disclosed.

Alerian develops and maintains a range of indices for the energy sector and provides market intelligence to investors about investments in energy infrastructure. Alerian licenses its indices to third parties for the creation of investment vehicles, such as exchange traded products (ETPs), and structured products that are separately managed by product issuers. ETPs are co-branded with Alerian's name and marketed by product issuers to retail and institutional investors. As of April 30, 2018, Alerian's indices were used by ETPs with assets under management over US$14bn.

There are 115 structured products featuring Alerian indices on SRP database including the Alerian MLP Index, Alerian MLP Infrastructure PR Index, Alerian MLP Infrastructure TR Index, Alerian Natural Gas MLP Index, as well as the Alerian MLP ETF. South Korea with over 50 structures linked to Alerian indices dominates the distribution of these indices, followed by the US (33), and Canada (28).

The most active providers of products linked to Alerian indices is Shinhan Financial Group (35), followed by CIBC (28) and NH Investment Securities (18), Morgan Stanley (10) and JP Morgan (nine)

Alerian will continue to be led by its current CEO, Kenny Feng (pictured) while the Aretex team will strengthen Alerian's index range seeking to increase product licensees, launch new products, and develop new sources of revenue, according to John L. Jacobs, who will join the board of directors of Alerian's new chairman at closing.

'We believe Alerian is well positioned for growth given the long-term, secular trends in the financial services sector, including the shift from active to passive investing, and its world-class reputation in the energy infrastructure end-market,' said Feng. 'Our partnership with Aretex will enable us to dedicate additional resources to the business and further support our partners.'

Jacobs formerly served as executive vice president of Nasdaq, where he was responsible for all aspects of Nasdaq's Global Information Services (GIS) business including indices and data. Jacobs is also a veteran in the index and ETF ecosystem, including the launch of the Nasdaq-100 Index Tracking Stock (QQQ).

Aretex Capital Partners was founded by its managing partners, Sergio D'Angelo and Andrew Feller. The Alerian transaction will be the initial investment by Aretex Capital Partners Fund.

'Alerian is representative of Aretex's strategy of pursuing proprietary opportunities, partnering with proven management teams, and emphasising global growth and business building in order to create long-term value,' said Feller.

The transaction is expected to close in the second quarter of 2018, subject to regulatory approval and other customary closing conditions. Barclays is acting as financial advisor to Aretex on the acquisition of Alerian. Ropes & Gray LLP and Sheppard Mullin Richter & Hampton LLP are acting as legal counsel.

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