Breakthroughs on the Buy Side: Steve Sachs
Breakthroughs on the Buy-Side
Steve Sachs
Managing Director and COO | Goldman Sachs ETF Accelerator
Steve joined Goldman Sachs in 2015 to help build out and launch the Goldman Sachs Asset Management ETF issuer business, then became COO of Goldman Sachs ETF Accelerator in 2022. Before joining Goldman Sachs, Steve spent most of his career as a trader and portfolio manager at buy-side firms.
Our core beliefs and principles have not changed, the biggest one being that first and foremost we are advisors to our clients. That has never wavered at any point during my tenure.
Q. In your role, what are you currently focused on?
In my previous seat I was Global Head of Capital Markets for the ETF business for Goldman Sachs Asset Management, and in that role I had many client meetings on my calendar in which I was walking clients through the roadmap of how to go about getting into the ETF space, and specifically the active ETF space. These meetings were with core institutional clients of Goldman Sachs — including other asset managers, hedge funds, and insurance companies — so I was happy to spend a couple of hours at a time on the phone with them.
Most of this was happening in 2018 and 2019, right around when Rule 6c-11 (the ETF Rule) was coming online. That seemed to be a bit of a catalyst, although in hindsight I think it was one of the ingredients in a soup that was already cooking. [With the ETF Rule] the SEC made it easier to launch an ETF, but it still was not easy. People still needed the roadmap. So when I was speaking with one of the partners here at Goldman Sachs about all of these client conversations I was having about ETFs, she asked me exactly the right question, which was “Why are you not trying to solve this problem holistically for our clients?” When we went back and reviewed the preceding 18-month period, we had talked to 41 separate clients representing $3 trillion in assets, all wanting exactly the same thing: How do we get into this space? How do we take our existing strategies, put them in an ETF wrapper, and deliver them to our clients in that manner?
The Goldman Sachs ETF Accelerator was started and built to serve that need for our clients. As global COO of this business over the last 18 months, I’ve been busy building out both the U.S. as well as global teams that are serving our clients. We’re a digital platform that allows our clients to launch, list, and manage their own ETFs, and do it faster and more cost-efficiently than they could do it on their own.
Q. How has Goldman Sachs innovated over the course of your time there?
When I joined the firm in 2015, I thought it would be a relatively short stint as I helped build out the ETF issuer business. I’d become known as a bit of a mercenary in the ETF space, helping build out both trading teams and Capital Markets teams and ETF businesses. Yet almost nine years later, here I still sit.
A lot of things have changed and evolved at Goldman Sachs over those years, but what hasn’t changed — and what I’ve found very interesting relative to my 30-year career in asset management — is the culture of the firm. Our core beliefs and principles have not changed, the biggest one being that first and foremost we are advisors to our clients. That has never wavered at any point during my tenure.
Still, the firm has come to operate differently over the last eight or nine years. Look no further than engineering and technology, for example. Goldman Sachs has employed and deployed a large number of engineers over the last nine years, and there are many ways in which we’ve been able to take proprietary technology and expose it directly to our clients — as we’re doing with the Goldman Sachs ETF Accelerator — or build out other solutions for our clients. At the end of the day, like a lot of other firms, we may look and feel more like a technology firm. Certainly the Goldman Sachs ETF Accelerator could be classified as a technology platform first. But what hasn’t changed is why we do what we do, which is to serve our clients and solve problems for them.
Risk management and risk mitigation often gets lost in the conversation because we like to talk about tech, innovation, scale, efficiencies, and speed — and all of that matters. But we’re always trying to not only deliver a good client experience, but also do it in a way that is operationally sound, risk managed, and delivering what it’s supposed to.
Q. How have Goldman Sachs’ innovations helped you deliver for your clients?
It benefits our ability to deliver solutions to them. For example, the business here in Goldman Sachs ETF Accelerator is really trying to shorten the amount of time it takes a client to get into the ETF marketplace and reduce their upfront investment to do so. How do you do that? You deliver not just expertise, but also technology, in an operationally and financially sound manner. Risk management and risk mitigation often gets lost in the conversation because we like to talk about tech, innovation, scale, efficiencies, and speed — and all of that matters. But we’re always trying to not only deliver a good client experience, but also do it in a way that is operationally sound, risk managed, and delivering what it’s supposed to.
Q. What industry trends are most impacting your work and your firm right now?
One is the active ETF space. Over the last three years, active ETF AUM has gone from less than 1% of the $10 trillion of ETF assets globally, to now approaching 7% of ETF AUM globally. I see that as the single biggest trend in all of asset management and investment management.
The other thing I would point to is fixed income. Active fixed income is still, in my mind, the single biggest green field in all of ETF product development. It is still a largely underserved asset class through the ETF wrapper. What we’ve all learned in the last 18 to 24 months, in the rate environment that we’re in, is that you can’t just be long equity risk premia in your portfolio. It turns out fixed income matters. That’s what we’re seeing driving a lot of product development innovations.
Q. How have you been investing in diversity, equity, and inclusion (DEI) or working to close gender and minority gaps?
Goldman Sachs continues — as it has for many, many years — to invest in and push forward the agenda of diversity and inclusion across the board. We in the Goldman Sachs ETF Accelerator not only echo that, but live it every day. It is extremely important to Lisa Mantil, the partner who is the Global Head of Goldman Sachs ETF Accelerator, and to our whole team globally.