Goldman Sachs Buys NEOS Investments in $2.25B Deal for Instant Crypto ETF Foothold

Goldman Sachs agreed on 12 August to buy options-ETF manager NEOS Investments for up to US$2.25 billion (AU$3.17 billion) in cash and equity, handing the bank a billion-dollar Bitcoin income fund four months after filing to build one of its own.

NEOS manages US$30 billion (AU$42.3 billion) across 19 options-based income ETFs as of 30 June, three of them tied to crypto: the NEOS Bitcoin High Income ETF (BTCI), the Boosted Bitcoin High Income ETF (XBCI) and the Ethereum High Income ETF (NEHI). 

The consideration is subject to the achievement of certain performance and service commitments, and Goldman expects to close in the first quarter of 2027 subject to regulatory approval.

NEOS ETF shareholders will receive proxy materials and vote on a new investment advisory agreement and on nominees to the board of trustees, the manager said, with the funds trading under their existing tickers throughout.

Read more: WLFI’s US$100M Buyer Linked to UK Money-Laundering Investigation

What Goldman Is Buying

BTCI launched on 16 October 2024 and held just under US$1.1 billion (AU$1.55 billion) on 11 August. It writes call options for premium income and takes its Bitcoin exposure through spot ETPs including BlackRock’s iShares Bitcoin Trust, which listed an Australian version on the ASX in November at a 0.39% fee. The fund never holds BTC directly.

NEOS puts BTCI’s distribution rate at 26.73% as of 31 July, paid monthly, most recently US$0.6458 (AU$0.91) a share. Total annual operating expenses run to 0.99%. Its one-year total return on net asset value was −40.91% to 30 June, and −7.65% annualised since inception.

A Fund Goldman Has Not Launched

Goldman registered the Goldman Sachs Bitcoin Premium Income ETF on 14 April, a fund built the same way: spot Bitcoin ETPs with calls written against them, partly through a Cayman subsidiary, with no direct Bitcoin holding. That registration would have taken effect on 28 June. 

The trust redesignated the date to 10 July, then to 24 July, then to 21 August, eight days after this acquisition was announced. The prospectus still carries no ticker and states the fund had not commenced investment operations.

Goldman analysts led by James Yaro told clients in January that an improving regulatory backdrop was a key driver of institutional crypto adoption, with 71% of institutional asset managers planning to raise digital-asset exposure within a year.

David Solomon, Chairman and CEO of Goldman Sachs, stated that NEOS’ approach “is highly complementary to our capabilities across buffer, managed outcome and income strategies.” 

Co-founders Garrett Paolella and Troy Cates join Goldman Sachs Asset Management as partners once the deal closes. 

Derivative-income ETFs hold about US$180 billion (AU$253.8 billion) industry-wide and have grown at a compound annual rate above 70% since 2021, according to Morningstar.

Read more: US Crypto Bill Hits September Roadblock as Senate Recess Begins