Goldman Sachs Launches Platform for Third-Party ETFs

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You know Goldman Sachs, always looking out for the little guy.

On Thursday, the major financial institution launched its exchange-traded fund accelerator platform, intended to help smaller third-party funds enter the $10 trillion ETF market. It also wants to make clear that, given its own ETF offerings, there is no possibility of a conflict of interest — so long as you read the fine print.

Fund Raisers

Most small ETF managers launch using “white label” services, which typically tackle the pesky support services like distribution, marketing, compliance and administration. Goldman’s platform will sort of offer that, it says. Instead of being a white-label adviser or sub-adviser, it will act as a consultant “providing services across fund launch and integration into the ETF ecosystem, along with portfolio implementation and capital markets solutions,” the bank told the Financial Times on Thursday.

The distinction likely avoids the perception of a conflict of interest, given that its asset management arm controls about $30 billion across 36 of its own ETFs. That’s enough cold comfort to convince a handful of prospective funds to enlist Goldman’s help:

• Three actively managed ETFs from Brandes Investment Partners launched via the platform on the CBOE on Thursday, all of which seek to invest in companies where Brandes sees undervalued potential.
• Meanwhile, Eagle Capital Management and Jeremy Grantham’s hedge fund GMO have both already filed to launch ETFs of their own through Goldman’s platform.

Time is Gold: The key advantage of going with Goldman is time. Typically, launching a new ETF can take at least two years, if not longer, at least according to Lisa Mantil, the project’s global head, who cited the stat in an interview with ETF Stream last month. Goldman will bring them to market in six months or less, she said. “The ETF ecosystem can be hard to navigate so having friends to lean on can help a new entrant get to market faster and smarter,” Todd Rosenbluth, head of research at VettaFi, told the FT. Sounds like launching an ETF accelerator is all CEO David Solomon had to do to actually make some friends.