Goldman Sachs to Acquire Neos Investments in $2.25 Billion Deal

Goldman Sachs is set to acquire Neos Investments, an exchange-traded funds (ETF) provider, for up to $2.25 billion in a bid to bolster its presence in active asset management. The investment bank aims to strengthen its asset management unit by capitalizing on the growing demand for actively managed ETFs that generate additional income and cap downside risk.

The deal is seen as a strategic move by Goldman Sachs, which has reported a 20% jump in net revenue from its asset and wealth management segment in the second quarter to $4.6 billion. This acquisition will propel Goldman's active ETFs to $80 billion, marking a significant milestone for the investment bank.

Neos Investments manages $30 billion in assets across 19 ETFs that cover a suite of index products. The firm has seen its flagship S&P 500 high-income ETF return around 19% over a one-year period through June, with total returns since inception close to 15%. Post-acquisition, Neos co-founders Troy Cates and Garrett Paolella will join Goldman Sachs as partners.