Goldman Sachs to acquire ETF business
Goldman Sachs is in talks to acquire IndexIQ, an ETF company with a hedge-fund replication fund named the 'IQ Hedge Multi-Strategy Tracker ETF.' The acquisition would provide Goldman Sachs with a way to enter the ETF market with control of a company with 13 funds already on the market and $1.18bn in assets. In turn, Goldman Sachs could increase assets of the ETF market, helping grow the industry further following the acquisition of VelocityShares by Janus earlier in the month.
Looks like Goldman plans to buy its way into the ETF industry.

Goldman Sachs is in talks to acquire IndexIQ, an exchange-traded fund company best known for its hedge-fund replication fund, the IQ Hedge Multi-Strategy Tracker ETF (QAI | B-73), according to Reuters. Terms weren’t disclosed.

The acquisition would give Goldman Sachs control of an ETF issuer with 13 funds on the market and $1.18 billion in assets under management. IndexIQ enjoyed $250 million in net inflows into its ETFs in the first nine months of the year. Its ETF lineup is headlined by QAI, which has $872 million in assets. It also offers mutual funds, separately managed accounts and ETF managed portfolios.

“IndexIQ has a nice portfolio of ETFs that could form a good building block for Goldman Sachs as it tries to make waves in the ETF market,” said Matt Hougan, president of ETF.com. “I’ve always felt that it should have more assets than it did. Goldman Sachs could dial that up.”

Earlier this year, Goldman Sachs transferred Michael Crinieri, a senior executive from its trading division with deep experience in ETFs, to build an ETF business within the investment bank.

Goldman’s plan follows by two days Janus’ announcement that it plans to acquire ETN/ETF firm VelocityShares for at least $30 million. Together, the two transactions suggest the already-big and growing ETF industry is about to get bigger as major players in the investment universe turn their efforts to staking a claim in ETFs.

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