Goldman Sachs Buys Innovator for $2B, Supercharging Its ETF Business
The $2 billion deal brings the pioneer of defined outcome ETFs under Goldman’s umbrella.
Goldman Sachs announced Monday that it will acquire Innovator Capital Management in a $2 billion deal, instantly expanding its footprint in one of the fastest-growing corners of the ETF market.
Innovator oversees $29.9 billion across 161 U.S.-listed ETFs. The firm is best known for pioneering the defined outcome ETF category, which uses options to engineer specific payoff profiles. The archetypical defined outcome, or "buffer," ETF offers partial downside protection in exchange for a capped upside.
Innovator's lineup carries a median expense ratio of 0.79%. At current asset levels, that translates to roughly $237 million in annual fee revenue. The earliest funds targeted the S&P 500; today the category extends across different indexes and asset classes
For Goldman, the acquisition marks a major addition to its $51.4 billion U.S. ETF business, which spans 50 products. Its largest funds today include the $14.8 billion Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC), the $6.6 billion Goldman Sachs Access Treasury 0-1 Year ETF (GBIL), and the $4.7 billion Goldman Sachs ActiveBeta International Equity ETF (GSIE).
In the announcement, Goldman CEO David Solomon highlighted the rapid growth of active ETFs.
“Active ETFs are dynamic, transformative, and have been one of the fastest-growing segments in today’s public investment landscape. By acquiring Innovator, Goldman Sachs will expand access to modern, world-class investment products for investor portfolios,” Solomon said.
While defined outcome ETFs are technically active because the issuer must construct and roll options positions, they function more like systematic, rules-based strategies. Innovator dominates the space, alongside FT Vest, which together hold the bulk of assets in the category.
According to ETF.com’s issuer league tables, Goldman is currently the 18th-largest U.S. ETF issuer, while Innovator ranks 24th. Combined, Goldman would move to 16th place, ahead of both Global X and Direxion. Breaking into the top 10 would require roughly $118 billion in U.S. ETF assets.
