Page 38 - Forbes Magazine-September 30, 2018

Investing FUNDS

A Wild Bet

on ETFs

From a room at WeWork,
Will Rhind is challenging
the giants with gold,
commodity and income
plays and hoping for
approval of a bitcoin
fund.
BY WILLIAM BALDWIN

ineteen hundred exchange-traded a billionaire in the oil-service business.
funds vie for attention on Wall Street. Is In 2007 Rhind was ensconced in a safe job at the
there room for yet more? Sure there is, London office of iShares, then an arm of giant Bar-
Nsays William Rhind, daredevil founder clays (and now part of giant BlackRock). Desiring
of the ETF vendor GraniteShares. something more adventurous, he left to join a mon-
Rhind’s operation, squeezed into a scrawny ey-losing operation called ETF Securities. It had
WeWork room in lower Manhattan, has a lineup only $300 million in its funds. He took a cut in pay
that includes a cut-rate gold fund, two commodi- but got a little equity.
ty funds and an unusual blend of high-payout se- Risky? Not really, Rhind insists, given that the
curities aimed at dividend seekers. The Securities & ETF business was growing fast and the vendors
Exchange Commission has rejected proposals for were starved for talent. If the new venture didn’t
bitcoin ETFs from GraniteShares and others but ap- work out, he could always land a job at another big
pears willing to reconsider. investment firm. Indeed, a mere job switch was too
GraniteShares’ eight employees are taking on tame for his taste; he increased his bet by invest-
an industry dominated by BlackRock, Vanguard ing some of his savings in additional shares in the
and State Street, each with ETF assets at least 1,000 business.
times as great as GraniteShares’. That takes some Assets at ETF Securities climbed 100-fold. But
gumption. Where did that come from? Graham Tuckwell, the founder of the firm, was
Rhind, 39, is a native of Scotland, where capital- slow to sell the company or take it public, so Rhind
ism hangs in the air. This is the birthplace of Adam jumped ship again, this time to run the $29 billion
Smith, of the 19th-century investment pools that SPDR Gold Shares ETF. A few years of catching his
were the forerunners of American mutual funds breath there left him anxious to play entrepreneur
and of Forbes magazine founder B.C. Forbes. As again, this time from the wheelhouse.
a teenager Rhind was inspired by his best friend’s Rhind incorporated GraniteShares in 2016 and
Wall Street impresario JAMEL TOPPIN FOR FORBES
William Rhind in his office dad, who as a young man took over a family fishing opened its first ETFs a year later. He got help from
in Manhattan: A little business in Aberdeen and decided to make some- Bain Capital Ventures and some other investors, but
inflation wouldn’t be bad for
his hard-asset plays. thing bigger out of it; that fellow, Ian Wood, is now managed to keep more than half the equity.

60 | FORBES SEPTEMBER 30, 2018