Goldman Sachs completes Innovator Capital acquisition, increasing ETF assets to $90 billion.

On Thursday, Goldman Sachs announced the acquisition of Innovator Capital Management, a provider of active exchange-traded funds. This move expands the Wall Street bank’s footprint in the rapidly developing industry.

Active ETFs are gaining popularity among investors due to their low costs and customizable methods, while passive index products have lacked performance.

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In December, the bank announced the acquisition of Innovator Capital, which manages 171 ETFs with $31 billion in assets, for approximately $2 billion.

Goldman Sachs CEO David Solomon said, “With this acquisition, we have taken a transformative step in our commitment to providing advanced investment solutions designed to deliver specific outcomes for investors thru market cycles.”

Following the agreement, Innovator’s co-founders Bruce Bond and John Southard will join Goldman Sachs as advisory directors; Chief Investment Officer Graham Day and Head of Distribution Trevor Terrell will serve as partners.

Goldman Sachs stated that more than 70 Innovator employes will also join the company.

Goldman Sachs Asset Management currently manages approximately 240 ETFs worldwide, with total ETF assets reaching 90 billion dollars.

Innovator uses a strategy called defined outcome strategy, which employs exchange-traded options to protect investors from market downturns while limiting upside movement to help cover the cost of protection.

Graham Day told Reuters, “What we found is that many advisors have clients who are pre-retirement or in retirement.” “They’re prioritizing capital preservation over capital appreciation,” he said.

Day said that the current size of the defined outcome market is between 70 billion and 80 billion dollars and that it is growing faster than the traditional ETF space.

Goldman Sachs Asset Management Chief Transformation Officer Bryon Lake said, “Traditional correlations are breaking down. Therefore, more and more investors are looking for different ways to gain market exposure,” he said.