Goldman Sachs Group Inc. (NYSE:GS) has agreed to acquire Neos Investments for up to $2.25 billion in cash and equity, expanding the Wall Street bank’s position in the rapidly growing actively managed exchange-traded fund market, according to a Bloomberg report on Wednesday.
The transaction will add Neos’s expanding portfolio of ETFs to Goldman Sachs Asset Management. Neos currently oversees approximately $32 billion across nearly two dozen options-based income ETFs.
The firm’s products have attracted increasing investor interest in recent years, particularly because of their high-yielding distributions and their ability to provide broader access to strategies traditionally associated with institutional investors.
Acquisition expands Goldman Sachs ETF business
Marc Nachmann, head of Goldman Sachs Asset Management, highlighted the growth potential of the business as a key factor behind the transaction.
“Neos has been on a tremendous growth trajectory,” Nachmann said in an interview. “Active ETFs are a fast growing space in the asset-management business.”
Following completion of the acquisition, Goldman Sachs’s total ETF assets are expected to reach approximately $130 billion, significantly strengthening the bank’s presence in the market.
The deal also expands Goldman’s exposure to actively managed and options-based products at a time when investors are increasingly using ETFs for income generation and more sophisticated portfolio strategies.
Neos has grown rapidly since 2022 launch
Neos was founded in 2022 and is based in Westport, Connecticut. Since its launch, the investment manager has attracted substantial inflows into its flagship options-based funds.
Several of its products combine monthly income distributions with strategies that have generated double-digit returns, helping the firm build its assets under management rapidly.
Neos has also emphasised the use of favourable tax treatment within its investment strategies, with the aim of improving investors’ after-tax returns.
Neos founders to join Goldman Sachs Asset Management
Neos co-founders Troy Cates and Garrett Paolella are expected to join Goldman Sachs Asset Management as partners once the acquisition is completed.
The remainder of the Neos team is also expected to move across to Goldman as part of the transaction, maintaining the investment expertise behind the existing platform.
The acquisition gives Goldman Sachs a substantially larger position in active ETFs while adding a fast-growing options-based investment platform to its broader asset management business.
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