Goldman Sachs Seals $2 Billion ETF Deal with Innovator Capital

Goldman Sachs has announced a $2 billion acquisition of Innovator Capital Management, a specialist in defined outcome exchange-traded funds (ETFs). The deal is structured as a mix of cash and stock (subject to performance targets) and is expected to close in the second quarter of 2026, which may change due to regulations and other factors. This acquisition highlights Goldman’s ambition to strengthen its position in the rapidly growing ETF market. 

Marc Nachmann, Head of Asset Management at Goldman Sachs, highlighted the acquisition as a pivotal opportunity to capture growth in the ETF space. Goldman Sachs Asset Management (GSAM), combined with Innovator, will oversee more than 215 ETFs globally, representing $75 billion in total assets. This includes the addition of Innovator’s $28 billion in assets under supervision (AUS) across around 159 ETFs. 

The deal aims to significantly boost Goldman’s ETF assets under management (AUM), raising it from $51 billion to $79 billion, and positions GSAM amongst the top 10 active ETF providers worldwide. This represents a positive push for Goldman Sachs, as they have previously lagged behind rivals such as BlackRock and Vanguard.

Innovator Capital Management specialize in “buffer funds” which use strategies to limit large losses whilst capping gains. These products appeal to investors seeking downside protection, especially when markets are volatile, offering a balance between risk and reward. By acquiring Innovator, Goldman gains a differentiated product but also expertise which would help it scale within the ETF market.

At the end of 2024, ETF products totaled just under $50 billion in assets, with global active ETF AUM reaching $1.6 trillion, and growing at a 47% compound annual growth rate (CAGR) since 2020. This reflects the growing importance of ETF products in investor portfolios and why Goldman’s acquisition is not just about scale but about aligning with a rapidly growing market. 

This acquisition also reflects Goldman’s broader pivot towards asset and wealth management and reinforces its long-term strategy to diversify and engage with both institutional and retail investors. CEO David Solomon describes the deal as expanding access to “modern, world-class investment solutions”. This will provide a platform to differentiate itself and create a competitive edge in risk-managed, active strategies.

For investors, the acquisition will provide greater access to Goldman Sachs' ETF products. Innovator’s buffer funds are a type of active ETF in which a manager selects securities and aims to outperform the broader market. These funds will offer downside protection to investors, a feature that has driven strong demand and contributed to net inflows exceeding $10 billion this year.

Given the recent global uncertainty and market volatility, these funds could be well-suited for investors seeking protection whilst maintaining growth opportunities. At the same time, this deal may intensify competition in the ETF space. Goldman’s differentiated approach to BlackRock and Vanguard’s passive strategies could attract investors looking for customized portfolios and profiles.

However, Goldman could face challenges through this acquisition, as scaling $28 billion AUS to compete with trillion-dollar ETF providers will require huge distribution and marketing efforts. Whilst mitigating losses and providing downside protection, they also cap gains, which may limit the overall appeal, especially in a strong bull market.

The deal is noted to be completed in the second quarter of 2026, but regulatory approval will hold a significant role in ensuring a smooth transition. According to Forbes, Innovator’s 60-plus employees will remain in the Wheaton office under Goldman Sachs, proving that managing change could be difficult. Although, it is said that investment management is expected to remain the same, which could support a more efficient transition.

Goldman Sachs’s $2 billion acquisition of Innovator Capital Management strikes a strategic expansion into the ETF space. The deal boosts their ETF assets to $79 billion, positioning them among the top 10 active ETF providers. 

This will boost competition within the market and offer new tools to investors who may focus on balancing risk and reward. Goldman Sachs is set to deliver and expand their business within the ETF framework, setting the stage for a promising chapter.