(Bloomberg) — An ETF issuer best known for thematic trading is looking to launch a new diversified investment strategy that channels the college endowment playbook — including bets on the booming world of private markets.
According to a filing with the US Securities and Exchange Commission.
It's the latest in a new wave of filings by ETF issuers seeking regulatory permission to offer private investments, as Wall Street seeks to expand access to an asset class once reserved for the financial elite.
Apollo Global Management Inc., in association with State Street Corp., last week Joined for such a product. others, including BondBloxxhave released their files.
“With this and Apollo's filing, it's the start of a new frontier in ETFs — the packaging of private and alternative investments,” said Athanasios Psarofagis of Bloomberg Intelligence.
Demand from retail investors for closed-end securities has boomed, with private markets now worth more than $13 trillion. Meanwhile, billions continue to pour into ETFs every month at the expense of old-fashioned mutual funds, providing a new pool of capital for private industry.
Tema's filings with the SEC on Friday did not specify a fee or management fee. Its core investment strategy, which would be actively managed, would identify macro themes and trends that are “undervalued by current market prices and at greater divergence from consensus opinion,” the company said in its filing. .
Investments categorized as “other securities” would not make up more than 15% of the fund's net assets, according to the filing. The SEC imposes a 15% limit on open-end funds that hold illiquid investments, defined as those that cannot be sold in seven days “without significantly changing the market value of the investment.”
The Yale University Endowment has been the model for investing in higher education. Money manager David Swensen led the foundation for more than three decades, helping grow it from $1 billion in 1985 to more than $30 billion at the time of his death in 2021. He brilliantly did it diversifying into private equity, hedge funds and real estate, which revolutionized the way other schools managed their money.