00:00We're joined by Bloomberg Finance reporter Catherine Dougherty. Is this considered a win
00:04for Goldman or is Goldman just putting itself out there with potential risk and riskier products
00:10just coming to market now as well? So I actually think that this product is intentionally meant to
00:15manage the risk. It's giving some upside, but it is capping at the downside. So this acquisition
00:22is giving them access to options based ETFs. This has grown organically. Nios is one of the biggest
00:29providers of such product. So for Goldman, they have the choice of either to build their own
00:34in-house organically or do what they did today, which is acquire an established player and add
00:41into their now expanding offering within their asset management business of ETF products. So
00:48that's what you're seeing with this $2.25 billion acquisition. Sizable, no doubt. Let's step back
00:55here. What does it say kind of directionally about the tack that Goldman is taking? I do think that
00:58there has been a shift, especially that Goldman has shown with its pocketbook to ETF products.
01:05So again, we have a lot of asset managers, even outside of Goldman that are looking at ETFs as an
01:12attractive product because you can get substantial upside, but also with certain products like this
01:18one, you can manage the risks of the downside. So you get exposure, but it's not just direct exposure
01:26to stocks or to indexes and major fluctuation that could occur if you are in individual
01:35performers. So today, when you are announcing a big acquisition like this, Goldman is just adding
01:43into what it can offer to both its clients and institutional partners. So what does Nios specialize
01:50in? Why did Goldman go for this particular ETF provider? Was it the only one for sale? I mean,
01:55I'm sure not, right? Options. So they are specializing in options-based ETFs. And this has
02:02some yield that they can take advantage of. And they're bringing in their team. The executives
02:08at this company are going to join Goldman's partnership. And they're going to remain on.
02:17So presumably, their leadership and their advice is sought after. The Goldman is not just acquiring
02:23this to add in the assets. They also really want to have the expertise from the leadership as well.
02:28I remember reading Lloyd Blankfein's memoir. He talked about how he was a J. Aaron and it was
02:32brought into Goldman. And it was an uncomfortable and uneasy integration of that company into Goldman.
02:37Has it gotten better at this, acquiring companies and kind of finding a kind of cultural unanimity
02:42that works? I do think so. Late last year, they acquired another ETF provider. So this is not
02:48the first time that they have done this. It seems like in naming, again, their leadership to Goldman's
02:57partner list, they are embracing the outside, you could say. So I think that that does signal,
03:03at least from an outside observer's perspective, an embrace rather than resistance to change.
Comments