Tidal Financial Group's Michael Venuto on the Future of ETFs and Active Management

Tidal Financial Group, a third-party service provider for ETFs, has grown from $1 billion to $36 billion in assets under management since 2018. Founded in 2012 as Toroso, the firm now oversees 230 ETFs and has 76 relationships and 130 employees. Its co-founder and CIO, Michael Venuto, attributes the success to a pivot from selling SMAs of ETFs to providing research that helps asset managers sell their products.

Tidal Financial Group, a third-party service provider for exchange-traded funds (ETFs), has experienced remarkable growth since its inception in 2012. Initially known as Toroso, the firm has evolved to oversee 230 ETFs and manage $36 billion in assets under management (AUM) by 2025. This growth is a testament to the company's strategic pivot from selling separately managed accounts (SMAs) of ETFs to providing research that aids asset managers in selling their products [2].

Michael Venuto, co-founder and Chief Investment Officer of Tidal Financial Group, attributes the company's success to its ability to adapt and innovate. In an interview with ETF Upside, Venuto discussed the firm's early challenges and how it overcame them. Initially, the firm faced resistance from potential clients who required a proven track record and substantial capital. However, Tidal Financial Group pivoted its business model to focus on providing valuable research that helped asset managers build and launch ETFs. This shift allowed the firm to secure clients such as SoFi and RPAR, and grow its AUM from $1 billion in 2018 to $36 billion today [2].

The growth of the ETF market has been a significant driver for Tidal Financial Group. According to Venuto, the industry has seen an increase in niche and single-stock ETFs, leading to a higher number of active ETFs than passive ones. This trend has created opportunities for Tidal Financial Group to help asset managers convert mutual funds to ETFs, leveraging the firm's expertise in capital markets [2].

Looking ahead, Tidal Financial Group is well-positioned to capitalize on the growing demand for ETFs. The company's ability to provide comprehensive research and support to asset managers is a key differentiator in the competitive ETF landscape. As the industry continues to evolve, Tidal Financial Group's expertise in ETF management will be crucial in helping asset managers navigate the complexities of the market.

References:
[1] https://ca.finance.yahoo.com/news/brazils-xp-aims-double-client-112825186.html
[2] https://www.thedailyupside.com/etf/industry-news-etf/etf-wave-hasnt-crested-yet-tidal-co-founder-says/