Overview
- Goldman Sachs has reached an agreement to purchase NEOS Investments for up to $2.25 billion, gaining access to approximately $30 billion in options-based income ETFs, which includes one of the largest Bitcoin covered-call funds available.
- This acquisition positions Goldman Sachs with a pre-established crypto income ETF business, providing a quicker alternative compared to its earlier filed Bitcoin Premium ETF, which some analysts suggested was an effort to get ahead of a similar offering from BlackRock.
- The acquisition aligns with the rise of derivative-income ETFs, which have grown to about $180 billion in assets and boast an annual growth rate exceeding 70% since 2021, according to Morningstar, with a significant portion attributed to crypto products.
Goldman Sachs is making a significant move into the realm of crypto income funds by acquiring NEOS Investments for a deal valued at up to $2.25 billion. NEOS is known for managing one of the largest Bitcoin covered-call ETFs in the market.
The Wall Street giant announced on Tuesday that the deal, which includes cash and equity components contingent on performance and service metrics, will integrate NEOS's approximately $30 billion in options-based income ETFs into Goldman Sachs Asset Management.
The transaction is anticipated to finalize in the first quarter of 2027, pending the necessary regulatory approvals. While the announcement highlighted NEOS's comprehensive array of derivative-income products rather than specifically focusing on crypto, it effectively grants Goldman a foothold in the digital-asset ETF market that it has been striving to establish independently.
A key component of this acquisition is NEOS's flagship Bitcoin covered-call fund, BTCI, which has gathered around $1 billion in assets since its inception. This fund generates monthly returns by selling options linked to Bitcoin exposure, providing investors with yield while limiting potential gains. NEOS also manages a comparable Ethereum product, which gives Goldman an immediate presence in a sector it had only recently begun to explore.
In April, Goldman had filed for its own Bitcoin Premium ETF, intended to generate income through options tied to spot Bitcoin ETFs. As reported by Decrypt, this structure led to speculation that Goldman was attempting to outpace a similar filing from BlackRock. However, acquiring NEOS offers a much quicker path by incorporating an established manager and its crypto funds rather than waiting for a newly launched product to establish itself in the market.
This acquisition comes at a time when derivative-income ETFs are rapidly becoming a major segment of the market, with a total asset value of around $180 billion and a compound annual growth rate exceeding 70% since 2021, according to Morningstar. The crypto sector is increasingly becoming a vital part of this growth as issuers seek to create yield-generating products based on Bitcoin and Ethereum.
David Solomon, Chairman and CEO of Goldman Sachs, who has stated that he owns "very little, but some" Bitcoin, emphasized the significance of NEOS's income and outcome strategies in the broader context of the deal.
Upon completion of the transaction, NEOS co-founders Garrett Paolella and Troy Cates will join Goldman Sachs Asset Management as partners.