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Goldman Could Make a Move on IndexIQ


Goldman Sachs (GS), the largest U.S. investment bank, is reportedly in talks to acquire exchange traded funds issuer IndexIQ.

Reuters broke the news after the close of U.S. markets Thursday, citing three unidentified sources supposedly familiar with the situation.

Goldman has previously regulatory approval to launch actively managed ETFs, but the firm has not brought those funds to market yet. By acquiring an existing issuer of ETFs, such as IndexIQ, Goldman could soon introduce its own ETFs.

The deal “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. Two of the sources spoke on Thursday and one on Wednesday,” according to Reuters.

New York-based IndexIQ had nearly $1.2 billion in assets under management as of Oct. 15 with the bulk of those assets ($870 million) found in the Index IQ Hedge Multi-Strategy ETF (QAI) .

While Reuters did not disclose a potential valuation for a Goldman purchase of IndexIQ, another recent deal in the ETF space could be a template. On Monday, Janus Capital (JNS), the mutual fund manager that recently hired bond legend Bill Gross, said it will acquire VelocityShares for $30 million. [Janus Gets Into ETFs With Velocity Shares Buy]

VelocityShares had $2.1 billion in assets under management at the time the Janus acquisition was announced. On that basis, Goldman could pay less than $20 million for IndexIQ, assuming a deal is commenced.

Other well-known IndexIQ ETFs include the Index IQ Merger Arbitrage ETF (MNA) , IndexIQ US Real Estate Small Cap ETF (ROOF) and the IndexIQ Canada Small Cap ETF (CNDA) .

ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.