Samsung Asset Mgmt. buys 20% stake in US ETF sponsor Amplify

South Korea’s Samsung Asset Management Co. invested in a US exchange-traded fund sponsor to expand its global presence in the market.

Samsung said on Friday that it has acquired a 20% equity stake in Amplify Holding Company LLC, becoming its second-largest shareholder. Neither firm disclosed the value of the deal.

The Wheaton, Illinois-based ETF sponsor, founded in October 2014, is renowned for its ETF products such as BLOK, which invests in blockchain companies, and IBUY, which focuses on online retailers.

With the transaction, Samsung and Amplify agreed to cooperate in the ETF market. Samsung is set to exclusively provide Amplify products in Asia, while the two companies plan to jointly develop new products, according to a statement.

“We expect to be able to offer more innovative investment solutions in Korea as well as in the Asian region through close collaboration with a global manager with capabilities for development of innovative products,” said Samsung CEO Seo Bong-kyun.

Samsung is likely to launch blockchain-related ETFs in overseas markets since their listings are banned in South Korea, industry sources said.

COMPETITION AGAINST MIRAE

The move is compared with its competitor Mirae Asset Global Investments Co.’s strategy to expand its business around the world. Mirae in 2018 took over Global X in the US, which accounts for about 70% of the global ETF market.

Thanks to the popularity of its unique products such as the lithium ETF, Global X’s asset under management (AUM) grew to more than $40 billion last year from $10.5 billion when Mirae acquired it. Amplify’s AUM was about 5.2 trillion won ($4.3 billion) as of the end-2021.

“Samsung had tried to acquire a foreign asset management firm after Mirae’s takeover of Global X, but it failed,” said an industry source. “Samsung’s latest equity investment is expected to intensify competition in the global ETF markets between the two companies.”

Write to Eun-Seo Koo at koo@hankyung.com
Jongwoo Cheon edited this article.