According to CNBC, Goldman Sachs announced on Monday it has agreed to buy Innovator Capital Management, a provider of defined-outcome ETFs, for about $2 billion. The deal is expected to close in the second quarter of 2026 and will see Innovator’s 60-plus employees join Goldman’s asset management division. Innovator had $28 billion in assets under supervision across 159 ETFs as of September 30. Goldman CEO David Solomon called active ETFs “dynamic, transformative, and one of the fastest-growing segments” and stated the acquisition will expand access to modern investment products. This follows other recent moves by Goldman, including a $1 billion investment in T. Rowe Price in September and the acquisition of venture capital investor Industry Ventures in October.
Goldman’s Big Bet on Buffers
So, Goldman is dropping $2 billion on a firm that specializes in “defined-outcome” ETFs. Basically, these are funds that use options contracts to try to cap your potential losses (and often your gains) over a set period. They’re like investing with training wheels, designed for nervous investors who want some exposure to the market but are terrified of a crash. It’s a niche that’s grown fast, but here’s the thing: it’s still a niche. Innovator’s $28 billion in assets is a drop in the ocean compared to the trillions in the overall ETF universe. Goldman is paying a huge premium for a specific, complex product set at a time when the dominant trend in ETFs is still cheap, simple, passive indexing.
The Desperate Pivot Continues
Look, this deal screams “strategic pivot” louder than a David Solomon DJ set. Goldman’s failed consumer banking adventure (remember Marcus?) is in the rearview, and asset/wealth management is now the promised land. Buying Innovator, investing in T. Rowe Price, grabbing Industry Ventures—it’s a full-blown acquisition spree to buy the growth its own organic efforts couldn’t generate. Throwing money at the problem is a classic Wall Street move. But can a firm with Goldman’s trading-floor DNA truly integrate and nurture these more structured, retail-friendly products? History isn’t exactly on their side. These engineered ETFs require clear communication and patient hand-holding with financial advisors and clients, not exactly Goldman’s traditional forte.
Risks Behind the Buffered Hype
Let’s get skeptical for a second. Defined-outcome ETFs are complicated. They come with a laundry list of caveats: set outcome periods, caps on upside, the reliance on options markets, and fees that are much higher than a plain vanilla S&P 500 ETF. If the market does something unexpected—which it always does—the “defined outcome” can quickly become “unexpectedly bad.” I think the real risk for Goldman is twofold. First, they’re buying at what seems like the peak of hype for these products. What happens when interest rates shift or volatility patterns change? Second, they’re betting big on active management in the ETF wrapper, a space that’s crowded and where many active managers consistently fail to justify their fees. This feels like a very expensive attempt to catch a wave that might already be cresting.
