Monday, June 1, 2009

Best Business EVER

AlphaNinja - Hearing that Vanguard offered to buy the iShares business from Barclays for $5billion. There's a current bid from CVC capital that allowed Barclays to search for a higher offer.

$5billion would be 1.5% of the $325billion managed by iShares. Cheap or not, iShares are ETF's - low cost funds that simply track an index. They sell themselves, as they're an alternative to costly active managed funds that consistently trail the market.

1.5% is below the 4% that large money managers usually sell for, in terms of Assets Under Management. But most fund families take MUCH more effort to run than simple ETF's, so in my view this sale price is a big win for Barclays.

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