In a major strategic move, global investment banking giant Goldman Sachs has announced a significant acquisition to bolster its presence in the rapidly expanding exchange-traded fund (ETF) market. The bank plans to acquire Innovator Capital Management for approximately $2 billion, a deal that signals a strong bet on investment products often dubbed "boomer candy."
The $2 Billion Strategic Acquisition
On Monday, December 1, 2025, Goldman Sachs revealed its intention to purchase Innovator Capital Management. This acquisition is a clear strategic push by Chief Executive David Solomon to build up the bank's asset-management division and broaden its offerings beyond traditional investing. The consideration for the deal will be paid in a combination of cash and equity, contingent on the achievement of certain performance milestones.
Innovator is a specialist firm overseeing around $28 billion in assets spread across 159 funds, as of September 30. The company has carved out a significant niche by focusing on a specific type of ETF known as defined-outcome or buffer funds. These funds utilize options contracts to provide investors with a buffer against market losses while still allowing them to participate in a portion of potential gains.
Why "Boomer Candy" is in High Demand
The nickname "boomer candy" stems from the product's immense popularity among baby boomers and individuals nearing retirement. This demographic has flocked to these funds as a way to remain invested in the equity market while adopting a more conservative stance. With concerns about market volatility and the potential for extended downturns, buffer funds have seen explosive growth in recent years.
Innovator was a pioneer in this space, launching its first such fund in 2018. These are actively managed ETFs, distinct from passive funds that simply track an index like the S&P 500. A fund manager actively curates the portfolio with the goal of outperforming the broader market while providing built-in downside protection. According to data from FactSet, ETFs offering protection on the S&P 500 have attracted over $10 billion in net inflows this year alone, with total assets under management reaching about $65.7 billion.
Goldman's Expanding Asset Management Ambitions
This acquisition is the latest in a series of moves by Goldman Sachs to diversify its asset management capabilities. The deal will propel Goldman's asset-management arm into the top 10 providers of active ETFs in the market. It follows other recent strategic investments, including the planned acquisition of venture-capital firm Industry Ventures for up to $965 million announced in October, and a $1 billion investment in asset manager T. Rowe Price in September to collaborate on bringing private-market investments to 401(k) plans.
However, defined-outcome funds are not without their critics. Some investment professionals argue that these ETFs do not offer the same level of diversification as traditional bonds and may deliver underwhelming returns during market upswings. Their potential gains are also influenced by interest rate environments, with lower rates typically constraining possible upside.
Despite the debate, Goldman Sachs's massive $2 billion wager underscores its conviction in the sustained demand for innovative, risk-managed investment products, particularly from an aging investor population seeking stability alongside growth.
