The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.

Concerned about an AI bubble? Sign up for The Daily Upside for smart and actionable market news, built for investors.

Texas holds ’em … Assets, that is.

Earlier this month, filings revealed that a Texas sovereign wealth fund was responsible for growing State Street’s Private Credit Fund (PRIV) by $740 million in the first quarter, a high-profile example of how institutional investors are reshaping the wealth management landscape as more mutual funds, insurance companies and banks enter the rapidly growing world of ETFs. A large portion of PRIV’s growth occurred on a single day in February, when assets ballooned from $100 million to nearly $500 million, much of that stemming from the Texas fund, according to a Bloomberg report.

“Now that institutions are more comfortable with ETFs, and now that they can get that targeted exposure, we are seeing more instances of ‘Oh, hey, we want to get that exposure within the ETF,’” said Dave Mann, head of ETF product at Franklin Templeton. “It’s almost like all options are out on the table to go talk with institutions.”

Sign up for The Daily Upside at no cost for premium analysis on all your favorite stocks.

READ ALSO: Fee Wars Are Changing Which ETFs Go to Market. Here’s How and A Blank Slate: Jan van Eck Talks 20 Years of ETFs

Institutional investors have always been a part of the wealth management landscape, and state public pension plans and hedge funds have a long history of using ETFs. What’s new is the level of involvement, which can influence holdings and strategy, as well as the increase in active fund adoption, Mann said. “Now that ETFs [are] so well ingrained as an investment strategy, there’s more opportunities for [institutions] to say, ‘OK, we will help support an active strategy, or we will help support a lower-AUM fund,” he added. Another reason for increased institutional involvement is the rise in so-called “anchor investors,” which Mann defined as those holding more than half of a fund’s assets.

According to recent data from Cerulli:

Institutional owners have nearly doubled their ETF usage over the past five years, with assets hitting a high of $337 billion last year.

Nearly half of institutional ETF users expect to increase their ETF allocations over the next two years.

Anchors Aweigh. But it’s not just institutional investors getting in early on certain ETFs as anchors. Although that constitutes one camp, Mann said, the other consists of institutions seeing an interesting strategy and wanting to support it after the fact. The institution will say, “‘Hey, we noticed you have this active strategy, and we’re watching it,’” he said. “Once it starts hitting some milestones or track records, sometimes an AUM threshold … institutions come in for size.”

This post first appeared on The Daily Upside. To receive exclusive news and analysis of the rapidly evolving ETF landscape, built for advisors and capital allocators, subscribe to our free ETF Upside newsletter.