Money manager Betashares plans Asian expansion after blockbuster year

​For the past 14 years, Alex Vynokur, the co-founder of Betashares, has quietly built his company into one of the largest local providers of exchange-traded funds and one of the country’s fastest growing asset managers.

In 2024, Betashares attracted inflows of $16 billion, lifting its total funds under management to $46 billion. “The focus for the past decade has very much been about building out the core ETF capability,” explains Vynokur. “We are now a steward of significant capital on behalf of more than 1 million Australian investors and over two-thirds of financial advisors.”

Betashares now accounts for one-third of every dollar that goes into the Australian ETF industry, according to Vynokur, and is eyeing growth in Asia.

Alex Vynokur, the chief executive of Betashares.Credit: Louie Douvis

An ETF is a basket of securities that are pooled into one fund, which is traded on a stock exchange. An investor in an ETF doesn’t own the securities, instead owning units in the ETF, while the ETF provider owns the shares or assets.

ETFs have grown in popularity with investors because they are cost-effective and offer exposure to thousands of diversified assets, such as a group of defence stocks, or the ASX 200 Index, or a variety of bonds. Globally, ETFs have had a banner year with more than $1 trillion invested into the sector, which is now worth an estimated $14 trillion.

Vynokur and his family arrived in Australia from Ukraine more than three decades ago, at the time when ETFs launched. He was a teenager, and his family came with just a few hundred dollars in their pockets.

Vynokur became a lawyer, then moved into venture capital, before co-founding Betashares with David Nathanson, also a former lawyer and investment banker, who had worked at Goldman Sachs and Macquarie.

We’re definitely, very cautiously, studying opportunities outside of Australia.

Alex Vynokur, Betashares co-founder

As with any start-up, Vynokur and Nathanson put in enormous hours to build the company to where it is today, as Australia’s second-largest ETF provider behind market leader Vanguard. Both are now multi-millionaires, though there has been a physical cost, says 46-year-old Vynokur: “I didn’t have any grey hair 14 years ago.”

The pay-off for both as come in the past few years. In 2021, private equity group TA Associates became Betashares’ majority shareholder, with at least 53.5 per cent ownership. In the middle of this year, Singapore’s Temasek, one of the world’s largest sovereign wealth funds, bought a minority stake.

Temasek paid $300 million for that shareholding, the size of which was undisclosed. The deal ascribed a multi-billion-dollar valuation to Betashares.

It was Temasek’s first investment in a financial services business in Australia. In a global portfolio valued at $S389 billion ($459 billion), Temasek has just over half invested in private assets.

“They have invested with the objective of maybe having more ownership,” says Vynokur. “We’re building this business for the long term, and they are genuinely interested in long-term value creation. We’ve never been about building something up quickly and flogging it. It doesn’t mean I’m opposed to being listed one day, but we’re definitely not in a hurry to go down that path.”

The proceeds are expected to help fund Betashares’ growth into new products. In the past year, the company launched retail investment platform Betashares Direct and bought a superannuation business from Bendigo and Adelaide Bank.

Vynokur also believes that Betashares has more room to expand its main ETF business.

“According to the ASX data, there are 8 million Australians who invest outside their superannuation,” he says. “Also, if you think about younger Australians, who are locked out of the property ownership game, you know being smart with money outside of property is absolutely crucial. We have a real role to play in that.”

There is also the opportunity for Betashares to expand its ETF business into Asia but, as for a priority, Vynokur won’t nominate a country.

“We’re definitely, very cautiously, studying opportunities outside of Australia … and that’s going to form part of our longer-term growth.”

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