White glove bulge bracket broker Goldman Sachs looks like it could be readying a move into the exchange traded fund space. And soon.
In a story first broken by Reuters, Goldman Sachs is in discussions to acquire IndexIQ, a New York-based exchange-traded fund provider, according to three sources familiar with the situation. The deal, if finalized, would enable the broker to introduce passively managed and actively managed exchange traded funds within months.
A Goldman Sachs Asset Management spokeswoman declined to comment to Reuters and a call and email to Adam Patti, the chief executive of IndexIQ, was not immediately returned.
The story noted the acquisition could be announced within the next few weeks, according to two of the sources. All of the sources wished to remain anonymous because they are not permitted to speak to the media.
In September, Goldman sought permission from the U.S. Securities and Exchange Commission to introduce a series of actively managed ETFs. However, if Goldman were to buy IndexIQ it would not need regulatory approval because IndexIQ already has it from regulators.
IndexIQ, which has $1.2 billion in ETF assets under management, offers a series of alternative investment strategies, and would fit well into Goldman Sachs Asset Management, which caters to high net worth investors, said David Nadig, chief investment officer of ETF research firm ETF.com who was interviewed by Reuters.
“It appears that Goldman is preparing to be a strong player in the ETF space,” Nadig told Reuters. In July the firm moved Michael Crinieri from the trading division to the investment division in order to launch a business that will sponsor ETFs and sell them to retail clients through third parties.
