The first dedicated investment fund for security in Europe has floated on the London Stock Exchange.
ETF Securities, a London-based issuer of exchange-traded funds, has partnered with US-based index provider ISE ETF Ventures to launch the ETFS ISE Cyber Security GO UCITS ETF, which is linked to ISE Cyber Security UCITS Index. The idea is to provide investors with a simple, liquid and cost-effective way to gain access to the cyber-sector, which ETF Securities forecasts to grow at a compound annual growth rate of 9.8% to reach $170 billion by 2020.
Security professionals expressed hope that the ETFS LSE Cyber Security UCITS fund will be the first of many cybersecurity-focused funds, and the beginning of more interest in early stage investment to support the next generation of security pioneers.
“The float of the first dedicated cybersecurity fund in the UK this morning is excellent news for the sector,” said Nithin Thomas, founder and CEO of security start-up SQR Systems. “The strategic importance of cybersecurity for the country is enormous, and a dedicated fund listed on LSE is a step in the right direction. I hope we will see much more activity in the coming months with funds dedicated to early stage companies as it is vital that we are able to call on home-grown expertise and technology rather than importing it from overseas.”
Porting ideas from academia will also be critical, he added.
“UK universities such as Bristol and Cambridge have fantastic research programs that are cultivating creative new approaches to security, but we still face a challenge in turning this research into viable business models that will help to protect our population and businesses from cyber-threats,” Thomas said. “Funding is key to providing opportunities for innovators who have previously had to relocate to markets like America [where] funding is more readily available.”