Goldman Sachs Agrees to Acquire Options-Based ETF Provider NEOS for Up to $2.25 Billion
Goldman Sachs announced Wednesday an agreement to acquire NEOS Investments for up to $2.25 billion in cash and equity. The transaction, slated to close in the first quarter of 2027, will bring $30 billion in active income ETFs under Goldman's asset management and position the bank as the eighth-largest active ETF provider, per Morningstar. NEOS co-founders Garrett Paolella and Troy Cates will join Goldman as partners.
Goldman Sachs has reached a definitive agreement to acquire NEOS Investments, a provider of options-based income exchange-traded funds, for up to $2.25 billion, the companies announced Wednesday. The transaction is expected to close in the first quarter of 2027.
The acquisition will add approximately $30 billion in active income ETFs to Goldman Sachs Asset Management, making the bank the eighth-largest active ETF provider, according to Morningstar data. The deal represents Goldman's second multibillion-dollar ETF-related purchase in under nine months; in December, the bank agreed to buy ETF issuer Innovative Capital Management for $2 billion in cash and equity.
Goldman CEO David Solomon said in a statement Wednesday: "As investor demand for active ETFs grows, NEOS' disciplined investment approach is highly complementary to our capabilities across buffer, managed outcome and income strategies. NEOS' innovative ETF solutions and intuitive financial education programs have helped them build a strong market presence across a diverse investor base, and this acquisition is an excellent strategic and cultural fit."
The bank highlighted its preference for derivative income ETFs, noting that such products help investors "navigate interest rate volatility and manage risk in the transparent, tax-efficient … wrapper." Goldman also pointed to the segment's rapid growth, citing a compound annual growth rate of more than 70% since 2021 for derivative income ETFs.
Under the terms of the agreement, the full NEOS team—including founders, investors, and client service employees—is expected to join Goldman Sachs Asset Management. NEOS co-founders Garrett Paolella and Troy Cates will become partners at the bank.
Paolella commented: "Our vision for NEOS since our founding has been to meet investors where they are, challenge conventional thinking and develop innovative investment solutions that aim to help achieve better outcomes. Every investor's income needs, risk tolerances and objectives are unique, and we built our business with that core understanding. Our commitment to that principle is absolute."
Cates added that Goldman "shares our commitment to investment excellence and innovation. Together, we'll combine NEOS' entrepreneurial spirit with Goldman Sachs' scale, expertise and resources to expand the reach of NEOS' solutions and deliver even greater value for our investors."
The final purchase price may vary slightly. Goldman noted that the $2.25 billion cash-and-equity figure "is subject to the achievement of certain performance and/or service commitments."