CoinShares International Limited (Nasdaq First North Growth Market: CS) (“CoinShares”), Europe’s largest digital asset investment firm, today announced it has acquired the ETF index business from Elwood Technologies. Through this platform, Elwood partnered with Invesco to launch the Invesco Elwood Global Blockchain Equity UCITS ETF (the “Invesco Blockchain ETF”), which provides exposure to internationally listed companies generating earnings from blockchain technology.
The Invesco Blockchain ETF has amassed over $1B in assets since its inception in 2019. In addition to index creation activity, Elwood built a best-in-class equity research team focused on companies in the digital assets space. The equity research unit will join CoinShares and benefit from the scale provided by this organisation. There will be no changes to the Elwood Index and no impact to the Invesco Blockchain ETF. Furthermore, it will continue to publish research on cryptocurrency and blockchain-related equities.
CoinShares CEO Jean-Marie Mognetti commented on today’s news, “As the popularity of thematic ETFs continues to grow, we have seen notable performance dispersion between strategies targeting similar exposures. With investors seeking exposure to cryptocurrencies as well as equities benefiting from blockchain technology, the Elwood Index and Invesco are natural partners for CoinShares. This acquisition marks another milestone for CoinShares as we execute on our strategic plan to generate shareholder value and become a global financial technology company. We look forward to welcoming Elwood’s index platform as the newest addition to the CoinShares team.”
The collaboration between CoinShares and Invesco will further bridge the gap between traditional asset management and cryptocurrencies whilst broadening both firms’ connectivity with global institutional investors and allocators. With $1,505B assets under management as at May 31, 2021, Invesco is one of the world’s largest asset managers offering a comprehensive range of active, passive and alternative investment capabilities, and was the world’s first institutional asset manager to introduce a blockchain-focused thematic ETF via its partnership with Elwood in March 2019.
Elwood Technologies CEO James Stickland added “Elwood is proud to have created the Elwood Global Blockchain Equity Index. This transaction enables Elwood to focus on its core mission to provide world class technology infrastructure for the digital assets market. We are very excited about the opportunities in this rapidly growing area.”
CoinShares reported £17.1M in Q1 asset management revenues from its digital asset ETP business, and recently launched bitcoin and ethereum ETFs in collaboration with 3iQ, and made a strategic investment in a new ESG-focused investment management company in the United States, Viridi Funds.
Gary Buxton, Head of EMEA ETFs at Invesco, concluded: “We believe that blockchain technology and crypto assets will continue to evolve and play an increasingly significant, mainstream role across business, finance and society. The ongoing success and growth of the Invesco Elwood Global Blockchain Equity ETF is a testament to the sector’s momentum and the compelling opportunities for investors. We have enjoyed our three-year collaboration with Elwood and are looking forward to building on this partnership with CoinShares.”
On July 5, 2021, CoinShares International Limited entered into a sale and purchase agreement (the “SPA”) to acquire the entire issued share capital in Elwood Asset Management Services Limited from its parent company, Elwood Capital Management Limited (“ECML”) for $17M. The transaction will settle via an equity swap, through the issuance of 1,298,322 new ordinary shares at a price of $13.09 per share, and is expected to complete in the second week of July upon admission of the consideration shares to trading. The SPA contains customary vendor and purchaser representations and covenants. Upon completion, the consideration shares received by ECML will be subject to a standard 12 month lock up. CoinShares will own the intellectual property and existing contracts relating to Elwood’s index business, including several products currently under development with Invesco.