Goldman Sachs Acquires NEOS Investments for $2.25 Billion

Goldman Sachs Group Inc. is significantly bolstering its exchange-traded fund capabilities with an agreement to acquire NEOS Investments, a rapidly ascending player in the options-based income ETF space. The deal, valued at up to $2.25 billion in cash and equity, signals a major strategic push by the investment banking giant to capture a larger share of the burgeoning demand for sophisticated income-generating investment products.

This acquisition positions Goldman Sachs Asset Management (GSAM), which currently oversees approximately $4 trillion in assets, as a formidable force in the active ETF market. Upon completion, the combined entity is projected to manage $80 billion in active ETFs, elevating GSAM to the eighth-largest active ETF provider globally within its $130 billion ETF platform. This move directly addresses the explosive growth in the derivative income ETF category, which has seen annual returns surpass 70% since 2021 and now commands roughly $180 billion in assets industry-wide.

NEOS Investments, founded just in 2022 and based in Westport, Connecticut, has quickly established itself as a leader in providing systematic options-based income ETFs. As of June 30, 2026, the firm managed approximately $30 billion across 19 distinct ETFs. Their core strategy focuses on leveraging data-driven approaches and derivative products to offer investors monthly income, tax efficiency, and diversification – a compelling proposition in the current market environment. The firm was co-founded by Garrett Paolella and Troy Cates, with notable backing from Aretex Capital and investor Tom Lydon.

The strategic rationale behind the acquisition is clear: to integrate NEOS' specialized expertise and product suite into Goldman Sachs' expansive asset management operations. David Solomon, CEO of Goldman Sachs, highlighted the combined entity's ability to offer investors a "diverse toolkit for different market environments," underscoring the commitment to broadening client solutions. The transaction is expected to close in the first quarter of 2027, pending regulatory approvals and customary closing conditions.

Under the terms of the agreement, both NEOS founders, Garrett Paolella and Troy Cates, are slated to join Goldman Sachs Asset Management as partners. The entire NEOS team is also expected to transition to Goldman Sachs, ensuring continuity and the seamless integration of their specialized knowledge. This talent acquisition is crucial for maintaining the innovative edge that has defined NEOS' rapid ascent.

This strategic move by Goldman Sachs is a testament to its ongoing investment in expanding its active asset management capabilities. By acquiring NEOS, the firm is not only enhancing its ETF offerings but also reinforcing its competitive stance in a rapidly evolving financial services sector. The deal was supported by legal counsel from Wachtell, Lipton, Rosen & Katz and Willkie Farr & Gallagher LLP for Goldman Sachs, and Ropes & Gray LLP for NEOS, with Barclays acting as the financial advisor to NEOS.