The firm agreed to sell most of its municipal-bond investment advisory business--six of its seven single-state muni strategies--to New York Life Investments. The fate of the affected strategies’ current comanagers is unclear, as NYL Investments subsidiary MacKay Shields will take over as subadvisor once the deal closes. Aquila also announced it agreed to sell the assets of two smaller strategies, one taxable-bond and one growth-equity, to Cantor Fitzgerald. All told, the transactions, which are set to close in mid-July 2024, will send eight of the firm’s nine mutual funds and over 70% of its assets under management out the door. These changes came on the heels of steadily declining assets under management over the past several years: Aquila's AUM dropped to $2.1 billion as of March 2024 from $3.8 billion in 2017.
As of this announcement on March 12, 2024, only Hawaiian Tax-Free Trust HULYX remains as an Aquila offering. Yet the firm's past shortcomings remain true today. Historically stubborn about lowering expenses in an increasingly fee-sensitive industry, Aquila's only remaining fund continues to be generally overpriced. Though Hawaiian Tax-Free Trust has been subadvised by the Bank of Hawaii for over three decades, past oversight concerns still linger as the family-owned boutique forges its path from here.