Goldman Sachs snaps up ETF firm Innovator Capital – Business News
Goldman Sachs introduced Monday it has agreed to amass Innovator Capital Management — a firm specializing in exchange-traded funds, or ETFs, designed to restrict investor losses — for about $2 billion.
The cash-and-stock deal goals to increase the Wall Street giant’s choices in a quickly growing space of the investment market.
“Active ETFs are dynamic, transformative, and one of the fastest-growing segments in today’s public investment landscape,” Goldman Sachs CEO David Solomon mentioned. Michael Brochstein/ZUMA Press Wire / SplashNews.com
The acquisition, set to close within the second quarter of 2026, will deliver Innovator into Goldman’s asset management division, which oversees investments for purchasers.
Innovator mentioned it managed $28 billion in property throughout 159 ETFs as of Sept. 30.
ETFs are investment funds that commerce on stock exchanges in the identical manner that particular person shares do. They usually maintain a basket of property that embody shares or bonds.
Innovator focuses on “defined-outcome” ETFs, which make the most of financial contracts generally known as choices — agreements that enable consumers to buy or sell property at predetermined costs — to cushion in opposition to market drops or goal particular returns over fixed intervals.
ETFs are investment funds, that embody a basket of property corresponding to shares and bonds, used to commerce on stock exchanges in the identical manner that particular person shares do. AFP through Getty Images
“Active ETFs are dynamic, transformative, and one of the fastest-growing segments in today’s public investment landscape,” mentioned Goldman Sachs CEO David Solomon.
“By acquiring Innovator, Goldman Sachs will expand access to modern, world-class investment products,” the veteran banker added.
The buy marks Goldman’s newest transfer to bolster its asset and wealth management business.
It is a key focus for the bank’s high executives after the firm shifted its focus away from increasing shopper banking providers.
In September, Goldman invested $1 billion in T. Rowe Price, a mutual fund company.
Then the next month, it acquired Industry Ventures, a firm targeted on enterprise capital — investments in startups and personal corporations — to strengthen its choices in various investments, that are property exterior conventional shares and bonds.
Goldman’s emphasis on asset management comes amid broader industry trends, with ETFs surging in reputation attributable to their low prices and ease of trading.
Defined-outcome merchandise, particularly, appeal to buyers searching for safety in unstable markets with out totally exiting shares.
Goldman’s asset management arm has grown considerably lately, serving to offset challenges in different divisions. The lender just lately posted bumper earnings after a resurgence in dealmaking exercise.
Terms of the acquisition weren’t disclosed past the approximate price.
Innovator, based in 2014, has carved out a area of interest within the ETF space by offering merchandise that present “buffers” in opposition to declines, usually tied to main indexes just like the S&P 500.
The company’s co-founders Bruce Bond and John Southard, together with different key executives, will be a part of Goldman Sachs Asset Management as half of the deal.
Bruce Bond and John Southard will be a part of Goldman Sachs Asset Management. innovatoretfs.com
Some 60 staff from Innovator are additionally anticipated to hitch Goldman Sachs Asset Management’s Third-Party Wealth and ETF groups.
Their variety of strategy has attracted billions in inflows as buyers navigate financial uncertainty.
Goldman Sachs shares rose barely in early trading on Monday following the information.
The firm, headquartered in New York, reported $12.7 billion in income for its asset and wealth management phase in 2024, an uptick from earlier years.
