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Technology > Investment Platforms > Turnkey Asset Management

Guggenheim Partners Lifts Out Rydex|SGI to Form $119B Asset Management Firm

By James J. Green

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Guggenheim Partners, the privately held global financial services firm, announced Wednesday that it would lift out Rydex|SGI and combine that ETF and alternatives firm with several of its investment management operations under the name Guggenheim Investments,which would have combined assets of about $119 billion. 

Todd Boehly, president of Guggenheim Partners, will lead the renamed firm as head of Guggenheim Investments, along with Guggenheim CIO Scott Minerd; chief administrative officer Don Cacciapaglia; and former Rydex CEO Richard Goldman as COO. 

rich goldmanIn an interview Thursday with AdvisorOne, Goldman (left) positioned the transaction as “an expansion of Guggenheim’s investment management operations, including folding in all of Rydex’s operations, and streamlining the naming convention” of the many Rydex and Guggenheim mutual funds and ETFs. That is, with one exception: the target beta funds of Rydex will continue to have the Rydex name. 

“I’ll be playing a major role in leading the teams that have been at Rydex for a long time” in Guggenheim Investments, Goldman said, and that the company “absolutely intends” to expand its mutual fund and ETF lineup. “Our product array is very comprehensive, is complementary,” he said. “We are very committed as an organization to establish ourselves as helping [advisor] clients capture market opportunities.” One way to do so, he suggested, would be through Guggenheim’s existing “institutional strength fixed income” investment products. Guggenheim Investments will also

“From a heritage point of view, Guggenheim and Rydex share a common perspective on clients—we want to be a trusted advisor to them,” Goldman said, vowing, “we will listen to them, and help deliver intelligent solutions to them.” Moreover, he said “our plan is to have well-developed distribution strategies” for all the advisor channels—RIA, broker-dealers and independents. 

In the statement announcing the plan, Guggenheim said that with the acquisition of Rydex|SGI it expected to become one of the top 10 providers of ETFs worldwide, offering more than 100 ETFs and ETPs.  Guggenheim Investments’ consolidated ETF lineup, including BulletShares, CurrencyShares and RydexShares will be marketed in the U.S. under the Guggenheim name. 

Chicago- and New York-based Guggenheim said it would offer a “broad spectrum of alternative and equity investment offerings alongside a leading credit research and fixed-income platform” through vehicles including SMAs, open- and closed-end mutual funds, offshore mutual funds, UITs and ETFs. Through the combination with Rydex|SGI, Guggenheim said it expected to become one of the top 10 providers of ETFs worldwide, offering more than 100 ETFs and ETPs. Guggenheim Investments’ consolidated ETF lineup, including BulletShares, CurrencyShares and RydexShares will be marketed in the U.S. under the Guggenheim name. 

Earlier this year, HighTower Advisors announced it had formed a strategic alliance with Guggenheim Partners that would give HighTower’s advisor partners access to Guggenheim’s Riskometry, a proprietary approach to assessing risk tolerance developed by Nobel Prize winner Danny Kahneman. 

In February 2010, Guggenheim Partners and a group of investors agreed to acquire Security Benefit Corp., parent company of Rydex|SGI. Rydex was acquired by Topeka, Kan.-based Security Benefit in January 2008. In October 2009, Guggenheim acquired ETF and ETF, closed-end fund and UIT provider Claymore Securities.

Goldman said Guggenheim and Rydex had almost two years “to learn each other’s businesses; this is not an abrupt marriage.” Finally, Goldman said, “We have a vigilant mindset on how we manage risk, both in our products and in the way we look at risk across the organization. It’s not our money, it’s our clients’ money.”

Rydex has also partnered with AdvisorOne in sharing the results of its surveys of RIA firms through Rydex AdvisorBenchmarking; read here the latest analysis of those findings by Rydex Managing Director Mark Zeitoun.

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