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ETF Firm RevenueShares Gets a Chinese Investor


RevenueShares, the ETF sponsor known for its six-ETF suite of revenue-weighted funds, landed a $7 million investment from a Chinese venture capital firm in exchange for a 22% stake in the issuer’s parent company.

Suzhou Industrial Park Kaida Venture Capital specializes in funding high-tech and financial companies across China, Cinthia Murphy reports for Index Universe.

Suzhou paid $7 million for 22% of VTL Associates, RevenueShares’ parent company. At $7 million for 22%, the implied valuation for 100% of VTL Associates could be in the area of $30 million. VTL is looking for outside capital because the firm has primarily been funded by internal capital to this point, according to Index Universe.

The allure of growing in China, the world’s largest country by population and second-largest economy, appears to be part of the reason VTL was willing to part with a stake.

“Growing the market in China is one of the major reasons we chose them as partners,” VTL Chairman Vince Lowery told Index Universe.

China’s ETF does hold some promise for issuers. Last week, Guotai Asset Management, a Chinese money manager, launched China’s first cross-border ETF, the Guotai NASDAQ-100 Exchange Traded Fund, on the Shanghai Stock Exchange.

Previously, investors in China could only gain exposure to U.S. markets through ordinary “Qualified Domestic Institutional Investor funds” – the QDII program grants a limited access for institutional investors, like banks, funds and investment companies, to invest in foreign-based securities. In the People’s Republic of China, the restrictions helped reduce conversion risks in a non-free floating currency. [Chinese Investors Can Now Access Nasdaq 100]

RevenueShares has a combined $530 million in assets under management across its six ETFs. The RevenueShares Large Cap Fund (RWL) is the largest with $184 million in assets. The firm’s other products include the RevenueShares Financials Sector Fund (RWW) and the RevenueShares ADR Fund (RTR).

ETF Trends editorial team contributed to this story.

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