Cullen Capital Management LLC Selects SEI's Advisors' Inner Circle Fund Trust to Launch First Active ETF
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Insights
The introduction of the Cullen Enhanced Equity Income ETF (DIVP) by Cullen Capital Management LLC represents a strategic move within the asset management industry to capitalize on the growing trend of active ETFs. The decision to utilize SEI's Advisors' Inner Circle Fund as the operational platform underscores the importance of efficient infrastructure in the competitive ETF space. The reported 34% increase in assets under management for active ETFs from 2022 to 2023 indicates a robust market appetite, which could suggest a favorable environment for new entrants like Cullen Capital.
From a market research perspective, the shift towards active ETFs may be driven by investors seeking higher income potential and market participation. This trend is further evidenced by the additional $131 billion in net flows into active ETFs, accounting for over a fifth of all ETF net flows in 2023. Asset managers who can provide innovative products like DIVP, which combines dividends and covered call options, may be well-positioned to capture market share in this expanding segment.
Analyzing the financial implications, the launch of the Cullen Enhanced Equity Income ETF could potentially diversify revenue streams for Cullen Capital Management. The active ETF market's growth trajectory, highlighted by the significant net flows, indicates a healthy demand that could translate into substantial management fees for asset managers. Additionally, the use of SEI's established operational platform might lead to lower operational costs and a quicker time-to-market, which are crucial for competitive positioning and profitability.
Investors may view the introduction of such innovative ETF products as a positive signal towards the company's growth strategy and adaptability. This could have a favorable impact on the valuation of SEIC's stock, as providing infrastructure for active ETFs may attract more asset managers to SEI's platform, thus generating additional revenue streams for SEI.
From a legal standpoint, the collaboration between Cullen Capital and SEI highlights the importance of compliance and regulatory considerations in the ETF market. SEI's expertise in addressing these aspects can mitigate potential legal risks associated with ETF product strategy and distribution. This support is crucial, as the regulatory landscape for active ETFs can be complex, especially with the integration of options strategies in products like DIVP.
Moreover, ensuring that the investment products adhere to current regulations is vital for maintaining investor trust and preventing legal repercussions. The reliance on SEI's operational platform suggests that Cullen Capital is prioritizing regulatory compliance, which could be a significant factor in the long-term sustainability and success of their ETF offerings.
Active ETF Trend Provides Growth Opportunity for Asset Managers
Assets in active ETFs have grown significantly from
Jeff Cullen, Managing Director of Cullen Capital Management, said:
"We've selected SEI's Advisors' Inner Circle Fund to launch our first active ETF because it offers an established, proven operational platform that efficiently addresses the complexities associated with ETF product strategy, distribution, and compliance. SEI's series trust and client service model provides us with the infrastructure and expertise needed to quickly and successfully bring our first ETF to market."
Mike Beattie, Managing Director of SEI's Investment Managers business and President of the Advisors' Inner Circle Fund, added:
"We are pleased to provide Cullen Capital Management with the operational infrastructure and advice they need to launch their active ETF product. With our turnkey operational platform and dedicated, skilled relationship management team, SEI will provide ongoing oversight of their ETF fund."
With the significant increase in new active ETFs hitting the market in 2023, investors piled another
John Alshefski, Senior Vice President and Managing Director of SEI's Traditional Investment Managers business, said:
"Asset managers like Cullen Capital Management are expanding their investment lineup with active ETFs, and we're excited to support them with the Advisors' Inner Circle Fund Trust—alleviating the need for them to build their own in-house operational infrastructure. With the rising popularity of active ETFs as an investment vehicle, we believe we are well-positioned to seize growth opportunities by providing an operational platform that can efficiently and cost-effectively launch and support ETF products."
SEI helped pioneer the series trust concept more than 30 years ago by introducing the Advisors' Inner Circle Fund Trust (AIC) with an institutional-quality turnkey mutual fund operating platform. The AIC enables investment organizations to rapidly launch and grow mutual funds, exchange traded funds, and interval and tender offer funds without having to build their own fund operating infrastructure. The platform is designed for asset managers seeking a more cost-effective way to operate their existing funds.
1 Source: FUSE, Morningstar
About SEI®
SEI (NASDAQ:SEIC) delivers technology and investment solutions that connect the financial services industry. With capabilities across investment processing, operations, and asset management, SEI works with corporations, financial institutions and professionals, and ultra-high-net-worth families to help drive growth, make confident decisions, and protect futures. As of Dec. 31, 2023, SEI manages, advises, or administers approximately
About SEI's Investment Managers business
SEI's Investment Managers business supplies investment organizations of all types with the advanced operating infrastructure they must have to evolve and compete in a landscape of escalating business challenges. SEI's global operating platform provides investment managers and asset owners with customized and integrated capabilities across a wide range of investment vehicles, strategies, and jurisdictions. SEI's services enable users to gain scale and efficiency, keep pace with marketplace demands, and run their businesses more strategically. SEI partners with more than 550 traditional and alternative asset managers, as well as sovereign wealth funds and family offices, including 48 of the top 100 asset managers worldwide.* For more information, visit seic.com/ims.
*Based on Pensions & Investments' "Largest Money Managers" 2022 ranking.
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SOURCE SEI Investments Company
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