Goldman Sachs Group, Inc. (GS.US) completes acquisition of Innovator Capital, ETF assets grow to $90 billion.

Goldman Sachs Group, Inc. (GS.US) announced on Thursday that it has completed the acquisition of the actively managed exchange-traded fund (ETF) provider Innovator Capital Management, further expanding the Wall Street investment bank's presence in the rapidly growing active ETF space. Active ETFs are one of the fastest-growing sectors in the asset management industry. With some passive index products lagging in returns, active ETFs have attracted investors with lower costs and flexible strategies. Goldman Sachs Group, Inc. announced in December last year that it would acquire Innovator Capital for about $2 billion. The latter manages 171 ETFs with total assets of approximately $31 billion. Goldman Sachs Group, Inc. CEO David Solomon said, "With this acquisition, we are taking a transformative step forward in providing investors with mature investment solutions that span market cycles." He mentioned that these solutions are designed to help investors achieve specific investment goals. After the completion of the transaction, Innovator co-founders Bruce Bond and John Southard will join Goldman Sachs Group, Inc. as advisory directors; Chief Investment Officer Graham Day and Distribution Director Trevor Trelar will join as partners. In addition, over 70 employees from Innovator will join Goldman Sachs Group, Inc. Goldman Sachs Group, Inc. stated that its asset management division currently manages approximately 240 ETFs globally, with total ETF assets reaching $90 billion. Innovator uses a "defined outcome strategy," providing investors with downside protection through exchange-traded options while limiting upside returns to hedge against protection costs. Innovator's Chief Investment Officer Graham Day stated, "We have found that many investment advisors' clients are in pre-retirement or retirement phases, where capital preservation is more of a priority than capital appreciation." He noted that the market size of ETFs related to the defined outcome strategy is between $70 billion and $80 billion, growing faster than the traditional ETF market. Byron Lake, Chief Transformation Officer of Asset Management at Goldman Sachs Group, Inc., stated, "Traditional asset correlations are breaking down, and more and more investors are seeking different ways to gain market exposure."