Goldman Sachs ups ETF push, set to acquire Neos Investments for up to $2.25 billion
Neos handles $30 billion worth assets across 19 ETFs that track a range of indexes and use options to generate income and limit losses.
There is a growing demand for such products as institutional investors seek recurring income and protection against portfolio losses amid market volatility.
Goldman has been looking to acquire in the actively managed ETF market to expand its asset management division and tap into growing demand. Earlier this year, the Wall Street giant completed its $2 billion acquisition of Innovator Capital, another provider of options-based ETFs.
“The deal capitalises on the accelerating adoption of derivative income ETFs and deepens durable asset and wealth management revenues,” Jefferies analysts said in a note, according to Reuters report.
Neos’ flagship S&P 500 High Income ETF returned about 19% in the year to June, while its total return since inception was nearly 15%, according to the firm’s website.
“As investor demand for active ETFs grows, Neos’ disciplined investment approach is highly complementary to our capabilities across buffer, managed outcome and income strategies,” Goldman CEO David Solomon said in a statement.Wall Street banks are increasingly relying on their asset management businesses for stable revenue to offset volatile investment banking and trading income.
Goldman’s asset and wealth management division generated $4.6 billion in net revenue in the second quarter, up 20% from a year earlier.
The acquisition, expected to close in the first quarter of 2027, will increase Goldman’s active ETF assets to $80 billion. Neos co-founders Troy Cates and Garrett Paolella will join the bank as partners after the deal closes.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
