One of the biggest names in gold has gone private.
Top gold fund Gilt, which owns gold-backed assets including gold coins and gold certificates, is now owned by private equity firm Gilt Capital Partners.
The new owners, which include New York investment bank Goldman Sachs and hedge fund Elliott Management, have agreed to buy Gilt for $1.7 billion.
The news was announced Wednesday, as the stock climbed more than 13 per cent in after-hours trading.
Gilt, based in New York, was started in 2000 as a private gold fund by former Wall Street lawyer Peter Schiff.
“Gilt has been the world’s premier gold asset manager and a leader in gold’s transformation from a volatile commodity to an asset that is undervalued by far,” said Gilt CEO Bill Bewkes.
“We have the vision to transform the gold price by leveraging a combination of institutional capital and innovative technology, all while making a positive impact on the world economy.”
The deal brings the firm’s total assets to $6.6 billion.
“The acquisition of Gilt is a major milestone in our company’s history,” Bewks said in a statement.
“Gilt is one of the most valuable gold funds in the world, and the combined experience of our founders and management team will help us continue to deliver the best value for our investors.”
Gold has been on a downward trend for more than a decade and is now worth just $1,800 an ounce.
In recent years, gold prices have been on an upswing, hitting a high of $1:1,600 last October, but fell to $1 in early January.
Gold futures were trading at $1 per ounce earlier this week.
Gold has historically been an attractive investment for gold investors, as it’s one of only two gold commodities that is both relatively inexpensive and has historically performed well in the past.
At the time of the 2008-09 financial crisis, gold was worth less than $1 an ounce, but has since climbed above $1 a bit higher than the current price.
Gold also trades at a premium over the U.S. dollar, with the dollar now trading at just over $1 on the London-based spot market.
Despite the gold crash, gold is still a popular investment for investors and has proven to be a popular choice for the U:S. Treasury.
A gold bullion ETF is currently trading for more money than all other gold investments combined, according to CoinDesk.
There are currently nearly 10,000 ETFs on the market, and ETFs have surged since gold was on the decline.