Goldman Sachs to Acquire NEOS, Expanding Crypto ETF Presence

Goldman Sachs enters an agreement to acquire NEOS Investments for up to $2.25 billion, adding Bitcoin and Ethereum option-based ETFs to its portfolio.

NEOS currently manages approximately $32 billion and offers nearly two dozen exchange-traded funds, including products providing exposure to Bitcoin and Ethereum.

The deal is expected to close in the first quarter of 2027, pending necessary regulatory approvals. A portion of the final purchase price depends on the achievement of specific financial and operational targets.

NEOS co-founders Troy Cates and Garrett Paolella will join Goldman Sachs Asset Management as partners, with the firm’s investment and client teams also transitioning to the group.

NEOS Adds Crypto and Option ETFs to Goldman Sachs

The acquisition provides Goldman with a portfolio of roughly 19 ETFs that utilize options for income generation or risk management. These include funds linked to BTC and ETH, which combine cryptocurrency exposure with option strategies to create recurring income.

These products differ from standard spot crypto ETFs. Instead of merely tracking the price movement of the underlying asset, they use options to generate additional yield. The trade-off involves capping a portion of the potential upside during periods of significant price appreciation.

For Goldman, the acquisition broadens its product range in a segment attracting investors who seek a balance between market exposure and regular distributions.

Following the completion of the deal, total ETF assets under Goldman Sachs’ supervision are expected to reach approximately $130 billion, with roughly $80 billion held in actively managed funds.

Goldman Builds a Larger Active ETF Business

NEOS represents the latest major acquisition for Goldman in this market segment. The firm previously agreed to acquire Innovator Capital Management for approximately $2 billion, gaining access to another fast-growing niche: ETFs designed to buffer losses against predetermined conditions on potential returns.

Both deals provide Goldman with a stronger presence in strategies that utilize derivatives rather than simply tracking traditional stock indices.

The motivation is also economic. Passive spot ETFs typically compete through increasingly lower fees, whereas specialized active products allow management firms to charge higher fees for more complex investment strategies.

Why Income ETFs Are Attracting Significant Capital

The market for ETFs using derivatives to generate income is expanding rapidly. According to Morningstar data cited by Goldman Sachs, assets in this category have reached approximately $180 billion, growing at an average annual rate of over 70% since 2021.

The primary appeal is the ability for investors to receive periodic distributions without having to manage option positions themselves. The fund executes the strategy, while the investor simply holds standard ETF shares.

In crypto products, this model adds another layer. Bitcoin and Ethereum provide the base price exposure, while options can convert a portion of their volatility into premium income.

However, this does not eliminate the risk of a decline in the underlying asset. While option income can offset some losses, it does not serve as protection against a significant downturn in the two leading cryptocurrencies.

Deal to Propel Goldman ETF Assets to $130 Billion

Acquiring NEOS positions Goldman among the larger participants in actively managed ETFs, but integration will be as critical as the size of the acquired assets. The bank must retain NEOS’s investment teams and client base while incorporating the funds into its significantly larger asset management platform.

The price structure partially ties the payment of up to $2.25 billion to future performance and business retention. This mitigates some risk for Goldman if assets under management or revenue from NEOS underperform expectations following the merger.

The next key milestone is regulatory approval before the planned closing in Q1 2027. For Goldman, the acquisition adds not only $32 billion in assets but also a ready-made platform in one of the fastest-growing sectors of the U.S. ETF market.