Global asset management firm TCW Group announced the acquisition of the Transform thematic exchange traded fund (ETF) business from sustainable transition-focused activist investor Engine No. 1.

San Francisco-based Engine No. 1 rose to ESG investment fame in its successful battle to win seats on Exxon’s board, aiming to push the oil and gas giant to act on the emerging global energy transition to clean and renewable sources of energy. The campaign gained backing from numerous high-profile investors including CalPERS, CalSTRS and the New York State Common Retirement Fund, and BlackRock. The firm focuses on creating value by helping companies transform their businesses to be sustainable, and targets companies that can drive long-term value by positioning to benefit from once-in-a generation transformations such as the energy transition and supply chain onshoring.

Chris James, Founder and Chief Investment Officer of Engine No. 1, said:

“Engine No. 1 is built around the idea that there is incredible investment opportunity in solving large-scale problems, and our thematic ETFs are constructed around that value creation principle. We’re thrilled that TCW recognizes that opportunity and is uniquely positioned to leverage its well-established platform and distribution network to quickly scale the business to seek even greater success.”

The Transform ETF platform manages more than $600 million in U.S. equity ETFs, which include the Transform Climate ETF (NETZ), which invests in companies identified as having a strategy to create value while working toward net zero and benefiting from the energy transition; the Transform 500 ETF (VOTE), which invests in 500 of the largest US public stocks, voting to hold leadership teams accountable with a focus on sustainability issues that create value and engaging with companies to strengthen performance, and; the Transform Supply Chain ETF (SUPP), which targets businesses benefiting and driving the transformation and relocalization of supply chains to North America, including companies in manufacturing, automation & innovation, and transportation

TCW said that the acquisition will expand its capabilities by providing infrastructure to build out a larger ETF platform, and expand the investment products available to the firm’s clients, with a focus on “sustainable investing grounded in economic realities.”

Katie Koch, President and CEO of TCW, said:

“This acquisition signifies an early chapter in TCW’s next stage of growth, adding important capabilities and infrastructure to provide clients with the ability to access TCW’s best investment ideas and strategies through innovative financial vehicles. We look forward to integrating the teams into TCW and continuing to invest in the growth of an ETF platform.”