Goldman Sachs Buys Neos Investments for $2.25 Billion

Goldman Sachs has agreed to buy ETF provider Neos Investments for as much as $2.25 billion, the latest move by the investment bank to bolster its presence in active asset management.

The deal will see Goldman acquire Neos' portfolio of 19 exchange-traded funds, which manage $30 billion in assets and use options to generate additional income while capping downside risk.

Growth in demand for active ETFs that offer hedging and recurring income has led institutions to seek out investments that can cushion drawdown risk in a volatile market environment.

Neos' flagship S&P 500 high-income ETF returned around 19% over the past year, while its total returns since inception are close to 15%, according to the firm's website.