Goldman Sachs (GS.US) plans to acquire ETF issuer Neos Investments for $2.3 billions to expand its actively managed ETF business.

According to Jinse Finance APP, Goldman Sachs Group (GS.US) will spend up to $2.25 billion to acquire Neos Investments, aiming to expand its asset management business in the actively managed exchange-traded fund (ETF) sector.

Marc Nachmann, head of asset management at Goldman Sachs, explained that this cash-and-equity transaction will further augment the product lines of the Wall Street giant with a rapidly growing ETF issuer. Compiled data shows that this young institution, established recently, manages nearly 24 income-focused ETFs based on options strategies, with assets under management reaching approximately $32 billion.

These funds have attracted widespread attention from investors in recent years due to their high yields. The Neos platform simplifies complex institutional-level investment strategies, making them accessible to a broader group of investors.

"Neos is experiencing exceptionally strong growth," Nachmann said in an interview, "Actively managed ETFs are one of the fastest-growing areas in the asset management industry."

Goldman Sachs has been ramping up its efforts in the ETF sector in recent months. At the end of last year, the bank acquired Innovator Capital Management for $2 billion, bringing the renowned "target outcome ETF" provider into its fold. The deal with Neos further enriches its product portfolio of options strategy ETFs.

Following the latest acquisition, Goldman Sachs’ ETF assets under management will rise to approximately $130 billion.

Headquartered in Westport, Connecticut, Neos has attracted continuous inflows since its founding in 2022, thanks to high double-digit returns and monthly distributions from its flagship options strategy funds. The company also emphasizes that its products take full advantage of tax benefits to effectively enhance after-tax returns.

After the transaction is completed, Neos co-founders Troy Cates and Garrett Paolella will join Goldman Sachs Asset Management as partners. All members of the Neos team are also expected to join.

By the end of the second quarter, the asset and wealth management division at Goldman Sachs, led by Nachmann, had assets under supervision exceeding $4 trillion—an increase of more than $700 billion from the same period last year, with the division's revenue up 20% year-on-year.

Goldman Sachs executives have repeatedly stated in recent months that the company remains open to further acquisitions, particularly in the private equity space, in order to compete with larger rivals like Blackstone Group (BX.US) and KKR (KKR.US) and address its own business gaps.