In what may be the ultimate Wall Street meets Main Street story, Goldman Sachs has agreed to buy Wheaton, Illinois-based Innovator Capital Management, an 8-year-old ETF investment firm, for $2 billion.

Founded in 2017, Innovator offers everyday investors a portfolio of exchange-traded funds that include options to buffer downside risk while capping gains to provide a less expensive and more accessible alternative to traditional hedge funds or annuities.

Innovator, which pioneered the defined outcome ETF model, has caught on quickly, drawing nearly $30 billion in assets under management as of November, according to the company.

“Most investors are not investing a lot of money in the stock market because they are unwilling to take the downside risk,” said Graham Day, chief investment officer at Innovator since its inception. “This is a tool to get and keep people invested.”

Located in the west suburbs of Chicago about 900 miles west of the New York-Connecticut nexus of hedge fund firms, Innovator has been making inroads with its groundbreaking ETF model, which has become a fast-growing platform to manage investment risk in volatile economic times.

Investors range from institutions such as universities to retirees looking to minimize the downside while still benefitting from potentially higher returns in equities — even with a cap — than in cash or bonds.

A signature offering, the Power Buffer ETF (ticker symbol PDEC), protects against the first 15% of downside losses over the next year, with a capped gain of 13.14% on the upside. Investors also pay a relatively low 0.79% management fee to Innovator.

“Once they understand they can invest in the S&P 500 and have known levels of downside protection, it gets them over the hump,” Day said. “The fact that we’re putting it in an ETF wrapper makes it a lot more accessible.”

Goldman Sachs will pay about $2 billion in cash and equity for Innovator, subject to performance targets, with the deal expected to close in the second quarter of 2026, pending regulatory approval.

Innovator’s 60 employees are expected to join Goldman Sachs and continue to operate their ETF business from the company’s downtown Wheaton headquarters.

The acquisition is also expected to significantly bolster Goldman’s own ETF offerings.

“Innovator’s reputation for innovation and leadership in defined outcome solutions complements our mission to enhance the client experience with sophisticated strategies that seek to deliver targeted, defined outcomes for investors,” David Solomon, chair and CEO of Goldman Sachs, said in a news release.

Occupying an office building emblazoned with its name on Front Street in Wheaton, Innovator has quietly been doing big business in the quaint county seat of DuPage County, perhaps best known as the academic launching pad for evangelist Billy Graham, who attended Wheaton College.

Innovator was founded by Bruce Bond and John Southard, who have turned Wheaton into something of an ETF mecca. The pair previously launched PowerShares — the longtime home of the QQQ, the enormous NASDAQ-100 ETF now owned by Invesco — in Wheaton in 2003.

Bond and Southard sold PowerShares for $60 million in 2006 but found their way back to exchange-traded funds with the 2017 launch of Innovator, billed as the world’s first Defined Outcome Buffer ETF.

Incorporating options as downside protection, they packaged their equity investments in a simple ETF, creating an alternative investment platform that caught fire with financial advisers, retirees and even institutions by offering lower costs and more defined risks than hedge funds, as well as tax efficiencies.

Innovator has since spawned competitors in the buffer ETF space, but as first movers, the company has seen enormous growth — from zero to nearly $30 billion in assets under management — since its launch.

Bond and Southard will likewise see a big return on their own sweat equity with the $2 billion sale of Innovator to Goldman Sachs.

“This transaction is a pivotal milestone for our business,” Bond said in a news release.

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