Pacer ETFs O’Hara Reveals Expansion Plans for ‘Europe and Beyond’

The Pennsylvania-based asset manager will target non-resident U.S. citizens.

Reviewed by: Staff
Edited by: James Rubin

Pacer ETFs president Sean O’Hara has revealed its expansion plans for “Europe and beyond” including targeting the “vibrant” demand for the UCITS platform in the U.S.

O’Hara said the group reached “sufficient scale” in the U.S. after hitting $35 billion in assets under management (AUM) at the end of 2023 and was now ready to target other growth markets.

Earlier this week, ETF Stream revealed the Pennsylvania-based asset manager was planning to launch four ETFs from its flagship Cash Cows range in Europe, having established an investment advisory business in Dublin.

“We now have sufficient scale so when we think about growth opportunities beyond the U.S., there are little side pockets where we can gather additional assets,” O’Hara said.

“We have expansion plans for Europe and beyond, but there is also a pretty vibrant market in the U.S. for investors who prefer the UCITS structure, non-resident citizens who have relationships with U.S.-based financial advisers.”

Demand for the UCITS structure in markets such as Mexico, Brazil and other South American countries has grown in recent years due to recognition of its regulatory and governance structure, as well as preferential tax treatment of UCITS vehicles versus the U.S.’s ‘40 Act.’

ETF Cross-Listings

Major European issuers have started to cross-list ETFs on the Bolsa Mexicana de Valores (BMV) over the past two years as demand has grown.

O’Hara added the firm was yet to fully establish its marketing and distribution plans for the “disjointed” $1.8 trillion European ETF market but was confident there would be demand for its Cash Cows range.

“We will have to see what the real plans look like for Europe,” he said. “The challenge is the market is disjointed and every country is a little different."

“We will have to think really carefully about what our plans for distribution in Europe, whether that is our boots on the ground or working with somebody else that could potentially market the products.”

Whatever route the group decides to take, O’Hara is confident of its unique offering.

“I do not think there is anything like the Cash Cows strategy in Europe. There are a lot of copycats coming but it is a fairly unique strategy that has performed well,” he said.

“We assume the same will be attractive to European, Mexican or Brazilian investors.”

To protect itself from potential copycat issuers, the group filed to trademark its flagship range with the U.K. government in March last year.

The range has fueled growth for the ETF issuer in the U.S. over the past two years, with total AUM growing from $10 billion in January 2021 to $35 billion by the end of last year.

Theo Andrew joined ETF Stream as a senior reporter in September 2021. He has over four years of investment writing experience spanning pensions and retail investments, most recently at Citywire, where he was a senior reporter covering environmental, social and governance investing.