NCCapital

Goldman Sachs is making another major push into the rapidly expanding exchange-traded fund market, announcing an agreement to acquire NEOS Investments for up to $2.25 billion. The deal will significantly expand Goldman's presence in actively managed ETFs, particularly products designed to generate income through options strategies.

NEOS manages approximately $30 billion across 19 ETFs that use options-based strategies to generate income and manage downside risk. The Connecticut-based firm has quickly established itself as a major player in the growing market for income-focused investment products.

The acquisition represents another significant step in Goldman's strategy to build its asset-management business. The firm has been aggressively expanding its ETF offerings as investors increasingly turn toward products that combine traditional market exposure with active management and income-generation strategies.

Goldman's latest acquisition follows its agreement earlier this year to purchase Innovator Capital Management for approximately $2 billion. Innovator specializes in defined-outcome ETFs, giving Goldman another foothold in the rapidly evolving active ETF market.

Once the NEOS transaction and the Innovator acquisition are completed, Goldman Sachs Asset Management's ETF platform is expected to oversee approximately $130 billion in total ETF assets. The combined platform would include about $80 billion in actively managed ETFs, placing Goldman among the largest active ETF providers in the industry.

The growing popularity of active ETFs has attracted major financial institutions looking for new sources of revenue and assets. Unlike traditional index funds, active ETFs allow managers to adjust portfolios and use strategies such as options to pursue specific investment objectives.

NEOS has benefited from rising investor demand for income-producing strategies. Its ETFs use options to generate additional income, an approach that can appeal to investors seeking regular distributions while remaining invested in major stock-market indexes.

Goldman Sachs believes the combination of its existing investment capabilities with NEOS's specialized expertise could create a broader range of products for investors. The acquisition also gives Goldman access to NEOS's established lineup and experienced management team.

NEOS co-founders Troy Cates and Garrett Paolella are expected to join Goldman Sachs as partners following the transaction. Their continued involvement could help Goldman maintain the investment strategies and expertise that helped NEOS build its rapidly growing ETF business.

The transaction is expected to close during the first quarter of 2027, subject to regulatory approval and other customary closing conditions. Until then, NEOS will continue operating as an independent company.

The acquisition underscores Wall Street's growing interest in ETFs as the investment industry shifts toward lower-cost, flexible products that can attract both individual investors and financial advisers. With NEOS and Innovator joining its platform, Goldman Sachs is positioning itself to compete more aggressively in one of the fastest-growing areas of asset management.