Goldman Sachs Acquires NEOS Investments for Up to $2.25 Billion

Goldman Sachs has agreed to acquire NEOS Investments for up to $2.25 billion in cash and stock, contingent upon certain performance and service commitments.

The transaction has not yet been completed and remains subject to customary conditions, including regulatory approvals, with an expected closing in the first quarter of 2027.

NEOS was founded in 2022 and currently manages approximately $30 billion in assets, offering 19 options-based income ETFs. Its core strategy is to generate additional income through option premiums by overlaying options on exposures to assets such as stock indices, bonds, gold, and Bitcoin.

The three crypto-related products - BTCI, XBCI, and NEHI - account for only about 4% of NEOS's total assets. However, Goldman Sachs is willing to pay a high price due to the growth and revenue-generating capability of active ETFs, particularly in options income strategies.

The total assets under management of global derivatives income ETFs have reached approximately $180 billion, with a compound annual growth rate of over 70% since 2021. This type of product also offers higher fees than traditional index ETFs, which may generate around $200 million in annual revenue for NEOS's two largest funds.

The transaction is part of Goldman Sachs' expansion of its asset and wealth management business to increase more stable fee-based income and reduce its reliance on cyclical businesses such as investment banking, M&A, and trading. After the transaction, Goldman Sachs' active ETF assets are expected to reach approximately $80 billion.