In order to extend its operations in actively managed exchange-traded funds and add around $30 billion in assets, Goldman Sachs has agreed to purchase NEOS Investments for up to $2.3 billion.
NEOS Investments will be purchased by Goldman Sachs for up to $2.25 billion in cash and stock. The deal’s performance and service obligations still apply to the final consideration.
Subject to regulatory clearance and further closing requirements, the deal is anticipated to conclude in the first quarter of 2027.
As of June 30, NEOS managed over $30 billion in assets across 19 systematic options-based income ETFs. According to Bloomberg, the ETF provider’s holdings have increased to almost $32 billion since its 2022 start, making it a rapidly expanding player in the active ETF market.
NEOS oversaw more than $30 billion in assets in 19 systematic options-based income ETFs as of June 30. Since its founding in 2022, the ETF provider’s assets have grown to about $32 billion, according to Bloomberg, making it a quickly growing participant in the active ETF market. The transaction comes after Innovator Capital Management, which specializes in defined-outcome and buffer ETFs, was acquired by Goldman Sachs Asset Management. Goldman’s options-based fund portfolio will be expanded to include income, buffer, and managed-defined outcomes with the addition of NEOS.
After the NEOS deal concludes, Goldman Sachs anticipates that the combined ETF platform would oversee over $130 billion in assets. According to Morningstar data as of June 30, the asset management would have around $80 billion in active ETFs, making it the eighth-largest active ETF provider.
Options-based income ETFs, which are intended to provide consistent income thru methodical investing techniques, are the foundation of NEOS’s business. After the transaction is finalized, co-founders Garrett Paolella and Troy Cates will become partners at Goldman Sachs Asset Management. The whole NEOS staff is also anticipated to relocate to Goldman.
“NEOS’ disciplined investment approach is highly complementary to our capabilities across buffer, managed outcome, and income strategies as investor demand for active ETFs grows,” stated David Solomon, chairman and CEO of Goldman Sachs.
As assets held in derivative income exchange-traded funds (ETFs) continue to increase, Goldman made its most recent acquisition. According to Morningstar data included in the deal announcement, the category has grown by more than 70% annually since 2021, reaching almost $180 billion in assets.
Derivatives are a component of tactics used by options-based income ETFs to generate income while controlling exposure to market fluctuations. Individual and institutional investors looking for income and portfolio risk-management tools inside an ETF framework have increased demand for these products.
After Innovator, Goldman Sachs Asset Management now has another options-focused company thanks to the acquisition of NEOS. After it is finished, Goldman will run NEOS in addition to its current ETF products as it increases the number of active ETF products it offers and the total amount of assets it manages.
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