Nottingham first fund administrator and white label ETF issuer to file for conversion of mutual fund to ETF
ROCKY MOUNT, N.C., 2 December 2020 – The Nottingham Company, a leading fund administrator and private label issuer to the mutual fund and ETF industry, continues its trend setting role servicing ETFs for boutique and mid-size firms, announcing today that Nottingham-affiliated entities have filed with the Security and Exchange Commission (“SEC”) for conversion of an existing family of mutual funds to ETFs.
The Board of a Nottingham-administered series trust approved the conversion with legal assistance from noted law firm Greenberg Traurig. Based upon the filing date and preliminary conversations, the initial fund managed by Adaptive Investments is expected to convert in January, with additional funds under the same group to follow shortly thereafter.
“Over the last two to three years, there has probably been more speculation and discussion regarding the conversion of open-end mutual funds to ETFs than any other subject in the ETF industry. The non-transparent ETF developments are important as well and interrelated in many cases. With the combination of both options now available, we expect a large number of mutual funds to convert to ETFs in the coming years.” remarked Kip Meadows, Founder and CEO of Nottingham.
Tax advantaged conversions are important when transitioning existing mutual funds to ETFs to avoid having to recognize all unrealized gains within the mutual fund portfolio. Mutual funds have merged on a tax advantaged basis for years. Converting mutual funds to ETFs is likely the next wave in the fund industry.
“Our business plan has focused on solving the puzzle of converting mutual funds to ETFs, and the ability to utilize the non-transparent structures that are so attractive to active portfolio managers, so prevalent in existing open-end mutual funds. We are very pleased to have taken the steps to make both options available to our current and prospective clients,” added Katherine Honey, President of Nottingham and Managing Member of OBP Capital, LLC, an ETF-focused affiliate firm.
Nottingham remains one of the largest privately held fund administration firms in the U.S., currently administering over $31 billion in AUA.
OBP Capital was established to assist Nottingham clients with ETFs, holding exemptive orders for both active and passive ETF structures, and provides needed oversight and compliance management for ETF portfolio managers.