Goldman Sachs will acquire NEOS Investments, a provider of options-based income exchange-traded funds, for up to $2.25 billion, the companies announced Wednesday.
The deal, expected to close in the first quarter of 2027, will add $30 billion in active income ETFs to Goldman Sachs’ asset-management arm and make the bank the eighth-largest active ETF provider, according to Morningstar.
“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 Wednesday. “NEOS’ innovative ETF solutions and intuitive financial education programs have helped them build a strong market presence across a diverse investor base, and this acquisition is an excellent strategic and cultural fit.”
The NEOS purchase marks the second multibillion-dollar ETF-related acquisition for Goldman in the past nine months. The bank announced in December it would buy ETF issuer Innovative Capital Management for $2 billion in cash and equity.
Goldman likes derivative income ETFs because they help investors “navigate interest rate volatility and manage risk in the transparent, tax-efficient … wrapper,” the bank said. Derivative income ETFs have seen a compound annual growth rate of more than 70% since 2021, Goldman said.
The bank expects the full NEOS team – including founders, investors and client service employees – to join Goldman Sachs Asset Management. NEOS co-founders Garrett Paolella and Troy Cates will become partners at the bank.
“Our vision for NEOS since our founding has been to meet investors where they are, challenge conventional thinking and develop innovative investment solutions that aim to help achieve better outcomes,” Paolella said Wednesday in a statement. “Every investor’s income needs, risk tolerances and objectives are unique, and we built our business with that core understanding. Our commitment to that principle is absolute.”
Cates, meanwhile, said Goldman “shares our commitment to investment excellence and innovation.”
“Together, we’ll combine NEOS’ entrepreneurial spirit with Goldman Sachs’ scale, expertise and resources to expand the reach of NEOS’ solutions and deliver even greater value for our investors,” Cates said.
The value of the deal may vary slightly. The $2.25 billion cash-and-equity figure “is subject to the achievement of certain performance and/or service commitments,” Goldman said.
