Close Close
ThinkAdvisor
Shutterstock image of 2 people using a iPad looking at stock charts

Industry Spotlight > Mergers and Acquisitions

First Trust Capital Buys Direct Indexer Veriti

X
Your article was successfully shared with the contacts you provided.

What You Need to Know

  • The First Trust-Veriti transaction is the 12th acquisition in the direct-indexing field over the past few years.
  • The news comes about two weeks after Fidelity Investments announced the rollout of its digital brokerage platform for retail investors.

First Trust Capital Partners says it has struck a deal to buy Veriti Management, a direct indexing asset management and financial technology firm. The transaction is expected to close on July 31, according to First Trust.

First Trust works with about $203 billion of assets. Its First Trust Advisors unit supervises unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts, while First Trust Portfolios serves as the sponsor and distributor of these products. Both entities are based in Wheaton, Illinois.

Veriti has about $1 billion on its platform, according to Gavin Spitzner, head of Wealth Consulting Partners. Spitzner tweeted early Wednesday: “$200bb @ftportfolios acquiring one of the last remaining independent direct indexing ‘pure play’ providers – $1bb Veriti Management.”

The First Trust-Veriti transaction is the 12th acquisition in the direct-indexing field over the past few years, he explained, adding. “Here’s my updated Direct Indexing market map showing that virtually every pure play DI solution has been swept up with almost all the remaining independent firms offering DI as a subset of a broader solution.”

chart of direct indexing M&A deals by Gavin Spitzner in July 2002

The news comes about two weeks after Fidelity Investments announced that the rollout of its digital brokerage platform will let do-it-yourself retail investors design customized index portfolios using fractional shares.

“Custom indexing empowers the advisor to deliver highly customized and tax-advantaged solutions that better align with the investment objectives, values and interests of their clients,” said Ryan Issakainen, senior vice president, ETF Strategist at First Trust. “We are delighted to begin this partnership with the Veriti team and look forward to working together to service the advisor community.”

Veriti Management, founded in 2018, is based in Boston.

“We’re excited to enable First Trust to help institutions and wealth management firms better align client portfolios with their values, while providing tax efficiency and personalization,” explained Jim Dilworth, co-founder and managing partner at Veriti, in a press release.

(Image: Shutterstock)