Exclusive: Goldman Sachs in talks to acquire ETF provider IndexIQ - sources

Thu Oct 16, 2014 4:19pm EDT
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By Jessica Toonkel

(Reuters) - Goldman Sachs Group (GS.N: Quote) is in discussions to acquire IndexIQ, a Rye Brook, New York-based exchange-traded fund provider, according to three sources familiar with the situation.

The deal, if finalized, would enable Goldman to introduce passively managed and actively managed exchange traded funds within months.

A Goldman Sachs Asset Management spokeswoman declined to comment. A call and email to Adam Patti, the chief executive of IndexIQ, was not immediately returned.

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. Two of the sources spoke on Thursday and one on Wednesday.

The valuation of the deal could not be determined.

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.

The firm was the first to launch an ETF that replicates hedge fund strategies, Nadig said. The $870 million IQ Hedge Multi-Strategy Tracker ETF is the firm's biggest most popular product.   Continued...

Goldman Sachs stall on the floor of the New York Stock Exchange is shown in this July 16, 2013 file photo. REUTERS/Brendan McDermid/Files