The folks at an 11-year-old fund firm in New York City are teaming up with those at a Boston subsidiary of a publicly traded, multinnatioal alternative manager from the other side of the pod, and together they're creating an ETF designed to give more investors access to a PE-like buyout strategy.

Jonathan Krane KraneShares Founder, CEO

This afternoon, Kevin Orr, managing director and head of strategic partnerships at Krane Funds Advisors, LLC (dba KraneShares [profile]), and John Lidington, at partner at Man Group's Numeric Investors LLC, unveiled the launch of the KraneShares Man Buyout Beta Index ETF (BUYO on the NYSE Arca). Krane serves as the new fund's investment advisor, while Numeric serves as index provider and subadvisor.

BUYO's inception date is today. The passively managed ETF comes with an expense ratio of 89 basis points.

The new fund is designed to track the Man Buyout Beta Idea. BUYO's PM team includes James Maund, head of capital markets at Krane as lead portfolio manager, plus Lidington and Jonathan Shelon,, chief operating office of Krane, as PMs.

"Our research indicates that many of the same methodologies that buyout funds use to target private takeover candidates can be applied to the public equity market to achieve similar results," Lidington states. "The approach helps identify potentially undervalued companies that in many cases may become public to private target takeover targets in the future."

Shelon describes BUYO as "a compelling solution for various investor profiles.

"BUYO may be appropriate for institutional investors seeking potential liquid beta to the PE buyout asset class while awaiting placement in traditional PE funds," Shelon states. "It may also be attractive to investors seeking highly correlated liquid alternative exposure to the PE market or investors looking to diversify their portfolios by implementing a more endowment-like asset allocation that includes a healthy weighting to PE-like strategies."

"We're excited to combine Man Numeric’s investment expertise ... with KraneShares’ ETF product development, marketing, and distribution capabilities," states Gregory Bond, CEO of Numeric.

BUYO is a series of the KraneShares Trust. Its other service providers include: Brown Brothers Harriman & Co. (DBBH) as custodian, dividend disbursing agent, securities lending agent, and transfer agent; K&L Gates LLP as counsel; KPMG LLP as indepedent accounting firm; SEI Investments Distribution Co. serves as distributor; SEI Investments Global Funds Services serves as administrator; and Solactive AG serves as index calculation agent. 

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