(Bloomberg) -- Eagle Capital Management is making a $1.8 billion entrance into the $9 trillion ETF industry. 

The New York, New York-based asset manager announced the launch of the Eagle Capital Select Equity ETF (ticker: EAGL), its inaugural fund, in a press release Monday. The active ETF will begin trading with $1.8 billion in assets, with several hundred of Eagle Capital’s clients in separately managed accounts — a private investment product commonly used by wealthy investors — converting into the exchange-traded structure. 

The asset manager, which was founded in 1988 and controls more than $26 billion, thought long and hard about whether to launch into the ETF wrapper, according to chief executive Michael Falcon. The decision was ultimately led by client demand for the relatively low-cost, tax-efficient ETF structure, which is famed for deflecting taxable capital gains. Additionally, assets in actively managed ETFs have grown to the point where Eagle Capital felt comfortable entering the space, Falcon said. 

 “We’ve been looking at this ETF and other alternatives for several years, we’ve been working on this launch specifically for well over a year,” said Falcon. “This is at a point where the ETF and specifically the active ETF market is mature enough and we’re in a position where we think we can manage and deliver this up to the same high standards that Eagle has always adhered.”

Eagle Capital’s debut is being shepherded through the Goldman Sachs ETF Accelerator, created by the bank to help its institutional clients create their own ETFs while providing services such as portfolio implementation and capital-markets heft. Goldman’s hub, which was announced in November 2022, gave birth to its first ETFs last October. 

The fund’s investment strategy is rooted in identifying high-quality stocks that have been undervalued by equity markets. EAGL’s “relatively concentrated, high conviction” portfolio typically holds between 20 to 35 names, and it’s not unusual for the firm to hold 60% of its assets in its top 10 names, Falcon said. EAGL will charge 80 basis points. 

“We’re certainly not deep-value investors, but we’re looking for dislocation of value when we buy positions. We have a very long-term investment horizon,” Falcon said. “We’re expecting to build positions and hold names for three to five years on the short end and seven to ten years on the long end.”

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