Invesco buys $25bn ETF provider Source

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Invesco buys $25bn ETF provider Source

Asset manager Invesco has agreed to buy exchange-traded fund (ETF) provider Source for an undisclosed sum as it seeks to expand its capabilities in the increasingly competitive passive market.

Invesco said the acquisition of Source, which has $25bn (£19.4bn) in internally and externally managed assets, would help strengthen its position in the European market while "achieving additional scale and relevance in the growing ETF market globally".

Known in particular for its gold and commodities offerings, London-based Source was put up for sale by private equity backer Warburg Pincus in 2016, less than three years after being acquired by the group.

A price war among ETF providers has made profitability difficult to achieve for smaller players despite the rapid growth of the sector in recent years. 

Invesco's own passives business, Powershares, has more than $150bn in assets under management. Market figureheads Vanguard and iShares have $4trn and $1trn, respectively.

Chief executive Martin Flanagan said: "The addition of Source will help us meet increasing demands from clients who want to work with investment organizations that can deliver across the full range of investment capabilities and provide the outcomes they seek.”

The deal is expected to close in the third quarter.