Goldman Sachs announced on Wednesday, August 12, an agreement to acquire NEOS Investments for up to US$2.25 billion, a deal that includes 19 options-based income ETFs and one of the largest bitcoin income funds, with US$1.1 billion in assets.
The deal, in cash and stock, is expected to close in the first quarter of 2027, subject to regulatory approvals and other customary conditions. Part of the payment depends on performance targets and service commitments.
The acquisition would expand Goldman Sachs Asset Management's US$40 billion options ETF business focused on income and results and would raise the bank's global ETF platform to about US$130 billion, adding NEOS and Innovator Capital Management. According to Goldman, the combination would make the bank the eighth-largest active ETF provider, based on assets as of June 30.
Goldman Sachs CEO David Solomon said NEOS complements the bank's existing strategies of buffer, managed results, and income, amid growing demand for active ETFs.
BTCI Fund and Competition with BlackRock
The broader market for derivative income ETFs reached about US$180 billion, with assets growing at an annualized rate of more than 70% since 2021, according to Morningstar, as cited by Goldman.
Among NEOS's funds is the NEOS Bitcoin High Income ETF (BTCI), with US$1.1 billion in net assets as of August 11. According to the prospectus, BTCI offers exposure linked to bitcoin without directly purchasing the cryptocurrency: it invests through bitcoin ETPs and uses an options strategy that seeks to generate monthly income by selling call options. The strategy allows participation in bitcoin's movements, giving up part of the upside in exchange for option premiums.
As of July 31, BTCI reported a distribution rate of 26.73% and a 30-day (SEC) yield of 1.62%. The net asset value (NAV) was down 25.54% for the year and 41.66% over 12 months. The July payment, of US$0.6458, had a preliminary estimate of 92% return of capital.
The bank was already preparing to enter this segment. In April, it filed with the SEC an amended prospectus for the Goldman Sachs Bitcoin Premium Income ETF, which would seek income and appreciation linked to bitcoin through the sale of call options tied to bitcoin ETPs. The proposed fund had not yet begun investment operations when the filing was made.
Bloomberg's senior ETF analyst Eric Balchunas noted that BTCI would allow Goldman to surpass BlackRock's newly launched iShares Bitcoin Premium Income ETF (BITA), which manages about US$60 million in assets. If the acquisition is completed, BTCI would give Goldman exposure to a bitcoin income fund almost 19 times larger than BlackRock's.
