{"id":22374,"date":"2025-12-02T19:07:03","date_gmt":"2025-12-02T19:07:03","guid":{"rendered":"https:\/\/incredipros.com\/?p=22374"},"modified":"2025-12-02T19:07:05","modified_gmt":"2025-12-02T19:07:05","slug":"why-goldman-sachs-is-paying-2-billion-for-bubble-protection-firm-innovator-capital","status":"publish","type":"post","link":"https:\/\/incredipros.com\/?p=22374","title":{"rendered":"Why Goldman Sachs Is Paying $2 Billion For Bubble Protection Firm Innovator Capital"},"content":{"rendered":"
\n

With investors getting increasingly anxious about the nosebleed valuations of public stocks, Goldman Sachs announced Monday morning that it\u2019s spending $2 billion to buy Innovator Capital Management, a firm that will cushion its clients from a crash.<\/p>\n

Wheaton, Illinois-based Innovator manages $28 billion in assets, mostly in defined-outcome ETFs which use options contracts to shield investors from the stock market\u2019s losses up to a defined buffer, in exchange for a cap that limits the funds\u2019 upside. Given the market\u2019s increased volatility, these relatively expensive \u201csafety-first\u201d ETFs are especially popular among retirees and investors approaching retirement. Despite criticism from billionaire hedge fund manager Cliff Asness and other investing pros that investors sacrifice too much in this trade, Innovator has grown rapidly since it launched its first buffer fund in 2018. Inflows to its 159 ETFs this year have totaled more than $4 billion.<\/p>\n

The sale was the second big payday for Innovator\u2019s CEO Bruce Bond and his cofounder John Southard, after the duo sold their first ETF business, PowerShares Capital Management, to Invesco in 2006 for $260 million.<\/p>\n

\u201cIt was the right time for us because the firm had gone through its early entrepreneurial days and grown rapidly, and was getting up to a scale where we thought it was an ideal size to move into another platform,\u201d says Bond. \u201cWe’re at the next stage where the concept of the product has been proven, and what we’re looking to do now is to talk about the bigger picture of how you incorporate these into portfolios. Goldman can be a huge catalyst for us there.\u201d<\/p>\n

Innovator\u2019s success has inspired imitators, and buffer funds now claim more than $75 billion in assets. First Trust, another Wheaton-based asset manager, has emerged as Innovator\u2019s chief competitor, and Allianz and AllianceBernstein have launched similar funds. The entry of Goldman Sachs, one of America\u2019s largest financial services firms, marks the biggest vote of confidence yet for the market niche\u2019s mainstream adoption.<\/p>\n

The acquisition will instantly make defined-outcome funds a significant piece of Goldman Sachs Asset Management\u2019s ETF lineup. Goldman and Innovator together have $80 billion in assets in ETFs, and the merger will lift Goldman Sachs Asset Management from the 45th-largest active ETF manager by assets into the top 10.<\/p>\n

\u201cIf you want to be big in asset management, you\u2019ve got to be big in ETFs, and we want to be big in active ETFs,\u201d says Bryon Lake, Goldman Sachs Asset Management\u2019s chief transformation officer and co-head of third party wealth. Lake has known Innovator\u2019s founders for decades since he was hired at PowerShares early in his career in 2005, and they stayed in touch as Bond and Southard built Innovator.<\/p>\n

The $2 billion acquisition price will be paid in a combination of cash and stock and will be subject to achieving certain performance targets, according to Monday\u2019s press release, with the deal expected to close in the second quarter of 2026. The price at 7% of assets is relatively rich when one considers that asset managers like BlackRock and T. Rowe Price are selling for about 1.2% of their assets in the market. As Innovator\u2019s majority owner, Bond will get the largest share of the proceeds, which could make him a billionaire if Innovator hits unspecified performance targets that would trigger the full $2 billion sticker price, but he says a large amount of the cash will go into his Bond Family Foundation. He has given more than $15 million to the foundation to date, primarily supporting Christian schools and organizations in Wheaton, Chicago and throughout the Midwest.<\/p>\n

Innovator\u2019s more than 60 employees will remain in their Wheaton office under Goldman Sachs\u2019 oversight, and its investment management is expected to remain the same. Bond plans on staying on to lead the business for \u201cas long as they\u2019ll have me,\u201d he says, though he is also in a reflective mood.<\/p>\n

\u201cWhenever you start something like this, especially something that hadn’t really been done before, it’s a big risk,\u201d says Bond. \u201cIt was a daunting task, and there were no assurances that it would be successful.\u201d<\/p>\n

For the avid fisherman who came out of retirement to start Innovator, Monday\u2019s milestone represents his biggest catch.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

With investors getting increasingly anxious about the nosebleed valuations of public stocks, Goldman Sachs announced Monday morning that it\u2019s spending $2 billion to buy Innovator Capital Management, a firm that will cushion its clients from a crash. Wheaton, Illinois-based Innovator manages $28 billion in assets, mostly in defined-outcome ETFs which use options contracts to shield<\/p>\n","protected":false},"author":1,"featured_media":22375,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[],"class_list":{"0":"post-22374","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"yoast_head":"\nWhy Goldman Sachs Is Paying $2 Billion For Bubble Protection Firm Innovator Capital | IncrediPros<\/title>\n<meta name=\"description\" content=\"With investors getting increasingly anxious about the nosebleed valuations of public stocks, Goldman Sachs announced Monday morning that it\u2019s spending $2\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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