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Mirae Asset's Global ETF Business Surpasses $100 Billion AUM

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Mirae Asset shines in US ETF market

It has been five years since Mirae Asset Global Investments acquired Global X, its subsidiary managing ETFs in the U.S. Global X, which is a rising star in the U.S. market, has grown into a leader in the thematic growth ETF market, operating assets around six times bigger compared to when it was acquired by Mirae Asset.

In February 2018, Mirae Asset Global Investments acquired Global X for $488 million (520 billion won). The aim was to expand Mirae Asset's global ETF network by challenging the U.S. market, which takes up more than 70 percent of the global ETF market.

Mirae Asset Global Investments focused especially on the growth potential of Global X at the time of the acquisition. It determined that Global X, equipped with an innovative and differentiated product lineup under the catchphrase "Beyond Ordinary ETFs," had enough momentum for growth.

"We decided to invest in Global X as it is a company with a competitive edge, just like Mirae Asset 15 years ago," Mirae Asset Financial Group Chairman Park Hyun-joo said back then. He added that the deal became the cornerstone of Mirae Asset's global business plan.

Mirae Asset has shared its know-how with Global X, from product development to research and operations. The current status of Global X in the U.S. market is as high as it can be ― its assets under management (AUM) stand at 45 trillion won ― as of the end of last year, which is up six times more than what it had at the time of the acquisition. Its compound annual growth rate (CAGR) has been at 29.13 percent for the past five years, which compares favorably with the industry average of just 14.5 percent. The number of its ETS products also increased to 100 from 49, which became the foundation for the stable growth of AUM.

Now, Global X is leading the thematic growth ETF market in the U.S. It concentrated on searching for innovative themes in the ETF market, which had mostly been dominated by passive products such as ones based on market indices, and launched products comprising companies with high growth potentials. It also strengthened research ― with its own research team. Global X has been offering solutions based on products and industry information. It thereby took the initiative in the fast-changing U.S. market. It also satisfies the diverse needs of investors with a broad lineup of products other than thematic ETFs.

Global X is especially competitive in covered call ETFs. Its Nasdaq 100 Covered Call ETF achieved 8 trillion won in AUM last year, becoming one of the most popular products among Koreans investing in the U.S. market and paying back with a high dividend.

Last June, Mirae Asset Global Investments and Global X jointly acquired ETF Securities, an Australian ETF management firm. It is the first time for a local asset management firm to acquire an ETF management firm overseas with the money it earned abroad.

Mirae Asset plans to expand its global business, due to the synergy effect with Global X. It thus changed the names of ETF Securities to Global X Australia, and Mirae Asset Global Investments Brazil to Global X Brazil, as a way to enhance the brand value of Global X. It plans to diversify its business and expand to Southeast Asia and the Middle East, strengthening its foothold as a global financial group.

"The U.S. market is essential for any ETF management company to grow into a global player as it leads the ETF industry. We will concentrate our efforts to make a leap forward as a global player, maximizing synergy effects with Global X, which is expanding its presence in the U.S. market," a spokesperson for Mirae Asset Global Investments said.

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Mirae Asset Securities acquires GHCO in $40m deal

Korean securities company enters European market

Mirae Asset Securities has acquired market maker GHCO for $40m as the group continues to expand its global ETF business.
The deal, which completed on 6 December, is the first purchase made by the securities arms of Mirae Asset Global Investments outside of the Asian market and is the firm’s first entry into Europe.

Speaking to ETF Stream, Daniel Izzo, CEO of GHCO, said the deal will give his firm the scale to compete directly with the two largest market makers in Europe, Jane Street and Flow Traders.
“The barriers to entry are exceedingly high in Europe and it takes scale to make a legitimate competitive effort. That is what this transaction gives us; the capability, scope and scale to get to the next level and pose as a legitimate competitor.”

GHCO, launched in 2005, will be incorporated as a subsidiary of Mirae Asset Securities in the first half of 2023, subject to regulatory approval.
Izzo (pictured), who has long been a proponent of shifting ETF trading volumes away from request for quote platforms and onto exchanges, will remain as CEO following the acquisition.

Meanwhile, GHCO’s head of trading and managing partner Stefan Kaba-Ferreiro is leaving to establish his own crypto business.
In a LinkedIn post, Kaba-Ferreiro wrote: “I will be completing my handover in London over the next couple of months and taking some time to recharge as the last few years in markets have been relentless.
“My partner and friend Dan is continuing on as CEO with new investors...as well as the rest of the excellent team.” In August, Mirae Asset Securities took its first steps in the European market with the appointment of
former Tradeweb director of ETF sales Alex Gladkow.
Gladkow joined the business as an “ETF ambassador” in Europe, responsible for enhancing the strategic direction of the firm as a trusted partner in the European ETF space.
The latest acquisition is a sign the group is looking to expand its ETF capabilities beyond asset management.
Mirae is currently represented in the European ETF market by Global X, which it acquired in 2018, with the firm embarking on a rapid expansion of its European ETF range this year.
Izzo added GHCO will continue to operate as an independent firm to avoid “conflicts of interest” with other ETF issuers.
In June, Mirae Asset Global Investments and Global X acquired ETF Securities Australia, which housed
roughly A$4.7bn assets under management (AUM) at the time of purchase.
The firm currently runs ETFs in the US, Brazil, Canada, Colombia, Europe, Hong Kong, India, Japan, Korea and Vietnam.

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