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Goldman Sachs

Leading global investment banking, securities and investment management firm.

Categories

Financial and Banking  

#126

Rank

$110.02B

MarketCap US

US United States

Country

Summary

Goldman Sachs is a multinational financial services firm providing securities, investment banking, and management services. The Goldman Sachs Group, Inc. provides investment banking, securities, and investment management services, as well as financial services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. 

Its Investment Banking segment offers financial advisory services, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defence, risk management, and restructurings and spin-offs; and underwriting services comprising public offerings and private placements of a range of securities, loans and other financial instruments, and derivative transactions. 

The company’s Institutional Client Services segment provides client execution services, such as fixed income, currency, and commodities client execution related to making markets in interest rate products, credit products, mortgages, currencies, and commodities; and equities related to making markets in equity products, as well as executes and clears institutional client transactions on stock, options, and futures exchanges. This segment also engages in the securities services business providing financing, securities lending, and other brokerage services to institutional clients, including hedge funds, mutual funds, pension funds, and foundations. 

It's Investing and Lending segment originates longer-term loans; and invests in debt securities, loans, public and private equity securities, real estate, consolidated investment entities, distressed assets, currencies, commodities, and power generation facilities. The company’s Investment Management segment provides investment products and services, as well as offers wealth advisory services, including portfolio management and financial counselling, and brokerage and other transaction services. The Goldman Sachs Group, Inc. was founded in 1869 and is headquartered in New York, New York.


History

He worked as a shopkeeper for years before settling in New York and starting a new business of trading in commercial paper in 1869. After the Civil War, Marcus Goldman moves to New York City and begins trading promissory notes. Goldman Sachs was founded in New York City in 1869 by Marcus Goldman.

In 1882, Goldman's son-in-law Samuel Sachs joined the firm. In 1885, the business expanded into a partnership when Goldman’s son, Henry, and son-in-law, Ludwig Dreyfus joined the company. In 1887, Goldman, Sachs began a relationship with the British merchant bank Kleinwort Sons, which provided an entry into international commercial finance, foreign exchange services, and currency arbitrage.

The company pioneered the use of commercial paper for entrepreneurs and joined the New York Stock Exchange (NYSE) in 1896. The firm's capital stood at $1.6 million. Marcus served as senior partner until 1904 when he died in New Jersey. The company issued the first IPO in 1906 when it took Sears, Roebuck and Company public. 

Starting out in 1907 as a porter's assistant making $2 per week, Weinberg rose quickly at Goldman, Sachs. In 1910, Walter Sachs becomes a partner of the firm founded by his grandfather Marcus Goldman, where he works alongside his father and brothers. In 1912, Henry S. Bowers became the first non-member of the founding family to become a partner of the company and share in its profits. Henry Goldman retired in 1917, and shortly afterwards Samuel and Harry Sachs became limited partners. The Sachs family gained full control of the firm until Waddill Catchings joined the company in 1918.

The business continued to grow throughout the first portion of the 20th century, ultimately creating the Goldman Sachs Trading Corporation to handle the new influx of business in the 1920s. The firm moved from 60 Wall Street to $1.5 million 12-storey premises on 30-32 Pine Street. The company's expansion continued well into the 1920s. In 1927, at the age of 35, Weinberg became only the second outsider to be made a partner. On December 4, 1928, the firm launched the Goldman Sachs Trading Corp, a closed-end fund. Catchings was the Goldman partner with the single largest stake in the firm.

The fund failed during the Stock Market Crash of 1929, amid accusations that Goldman had engaged in share price manipulation and insider trading. In 1930, the firm ousted Catchings, and Sidney Weinberg assumed the role of senior partner and shifted Goldman's focus away from trading and toward investment banking. By 1933, the investment subsidiary was worth only a fraction of its initial $10 million capitalization.

¿Goldman, Sachs's most important management of a new share issue occurred in November 1956, when shares of the Ford Motor Company were sold to the public for the first time. Due to Weinberg's heavy influence, the firm formed an investment banking division in an attempt to shift focus off Weinberg. The company handles the flooring trade of a block of Alcan Aluminum stock--the largest block trade ever made at the time. In 1969, Levy took over Weinberg's role as Senior Partner and built Goldman's trading franchise once again.

 In 1970, Goldman Sachs established its first international office in London, United Kingdom. Another financial crisis for the firm occurred in 1970 when the Penn Central Transportation Company went bankrupt with over $80 million in commercial paper outstanding, most of it issued through Goldman Sachs. 

Just over a century after Goldman Sachs began dealing in commercial paper, the firm leads a commercial paper issuance for state-owned electric utility Électricité de France in 1974, the first ever in the United States on behalf of a foreign government entity. During the 1970s, the firm also expanded in several ways. It also pioneered the “white knight” strategy in 1974 during its attempts to defend Electric Storage Battery against a hostile takeover bid from International Nickel and Goldman’s rival Morgan Stanley. John L. Weinberg and John Whitehead were promoted to senior partners upon the death of Gus Levy in 1976.

In 1981, it acquired commodities trading firm J. Aron & Company, which dealt in precious metals, coffee, and foreign exchange. In May 1982, under the leadership of co-partner John Weinberg--son of Sidney Weinberg--the firm took over the London-based merchant bank First Dallas, Ltd., which it later renamed Goldman, Sachs, Ltd. 1982: London-based First Dallas Ltd. acquired. Goldman Sachs opens an office in Hong Kong in 1983, recognizing the role of the port territory as a vital financial bridge for the entire Asian region. Beginning in 1984, a new craze erupted on Wall Street in which investment companies engineered leveraged buyouts (LBOs) of entire firms.

1986 also was the year when Goldman became the first United States bank to rank in the top 10 of mergers and acquisitions in the United Kingdom. Structured like preferred stock, the expanded partnership was similar to that undertaken in 1986 with Japan's Sumitomo Bank when the bank purchased a 12.5 percent share of the brokerage house for upwards of $500 million. In 1986, the firm formed Goldman Sachs Asset Management, which manages the majority of its mutual funds and hedge funds. But the market crash of October 1987 reduced the profitability of transaction work. In early 1989, in an effort to retain its partnership status in the face of growing corporate competition, Goldman, Sachs elected to seek capital to expand its merchant-banking activities.

Other changes in the company included the 1990 introduction of the GS Capital Growth Fund, a mutual fund targeted for the moderate-income investor through a minimum investment of $1,200. Robert Rubin and Stephen Friedman assumed the co-senior partnership in 1990 and pledged to focus on the globalization of the firm to strengthen the merger & acquisition and trading business lines. The firm experienced rapid growth by participating in several overseas investment projects, acting, for example, as a global coordinator in Finland's Neste Oy oil company in 1992.

By 1993, the company had become one of the most profitable in the world, with pre-tax earnings of $2.7 billion. ¿ A federal appeals court rules that Goldman Sachs can no longer advise corporate clients in bankruptcy organizations. Also in 1994, Jon Corzine assumed leadership of the firm as CEO, following the departure of Rubin and Friedman. By mid-1994, the company had named 58 new general partners, a record for the company; announcements of a new wave of layoffs quickly followed. The 1994 economic crisis in Mexico threatened to wipe out the value of Mexico's bonds held by Goldman Sachs. It also launched the Goldman Sachs Commodity Index (GSCI) and opened its first office in China in Beijing.

The $17 billion offering, which was the largest bond sale on record, was Apple’s first since 1996. The company was back on track, posting a pre-tax profit of $565 million for the first quarter. He joined the company in 1997 when Goldman Sachs acquired J. Aron & Company. After ditching its initial plans in September 1998--due to faltering global markets--Goldman, Sachs launched one of the largest financial services IPOs in United States history. Then, the company began toying with the idea of going public.

In early May 1999, the company was listed on the New York Stock Exchange, raising $3.6 billion. After decades of debate among the partners, the company became a public company via an initial public offering in May. With the firm’s 1999 IPO, Paulson became Chairman and CEO of the firm. One of the largest events in the firm’s history was its own IPO. Goldman acquired Hull Trading Company, one of the world’s premier market-making firms, for $531 million. The Goldman Sachs Group Inc.--the company changed its name from Goldman, Sachs & Co. after it went public--has been a respected player in world finance for more than 100 years.

In January 2000, Goldman, along with Lehman Brothers, was the lead manager for the first internet bond offering for the World Bank. In September 2000, Goldman Sachs purchased Spear, Leeds, & Kellogg, one of the largest specialist firms on the New York Stock Exchange, for $6.3 billion. Goldman Sachs nearly tripled its employee count before making a series of job cuts in 2001. The company stood as the leading advisor in merger activity and was involved in eight out of the ten largest deals completed that year.

Indeed, in 2002 both IPO and merger activity faltered. 2002: Subsidiary Goldman, Sachs & Co. becomes one of the largest market makers in the industry. In March 2003, the firm took a 45% stake in a joint venture with JBWere, the Australian investment bank. In April 2003, Goldman acquired The Ayco Company L.P., a fee-based financial counselling service. In 2006, the United States housing market began a historic turnaround. Meet GSAMP Trust 2006-S3, a $494 million drop in the junk-mortgage bucket, part of the more than half-a-trillion dollars of mortgage-backed securities issued last year.

On October 15, 2007, as the crisis had begun to unravel, Allan Sloan, a senior editor for Fortune magazine, wrote: During the 2007 subprime mortgage crisis, Goldman profited from the collapse in subprime mortgage bonds in summer 2007 by short-selling subprime mortgage-backed securities. 

On September 21, 2008, Goldman Sachs and Morgan Stanley, the last two major investment banks in the United States, both confirmed that they would become traditional bank holding companies. On September 23, 2008, Berkshire Hathaway agreed to purchase $5 billion in Goldman's preferred stock, and also received warrants to buy another $5 billion in Goldman's common stock within five years. In 2008, Goldman Sachs started a "Returnship" internship program after research and consulting with other firms led them to understand that career breaks happen and that returning to the workforce was difficult, especially for women.

The company received an investment of $10 billion from the US Department of Treasury as part of the Troubled Asset Relief Program (TARP). It used government investment to rebuild its business, and the loan was repaid in June 2009. In December 2009, Goldman announced that its top 30 executives would be paid year-end bonuses in restricted stock that they cannot sell for five years, with clawback provisions. As of 2009, after further stock offerings to the public, Goldman is 67% owned by institutions (such as pension funds and other banks). In 2009 The Private Wealth Management arm of JBWere was sold into a joint venture with National Australia Bank.

In 2011, Goldman took full control of JBWere in a $1 billion buyout. In June 2013, Goldman Sachs purchased a loan portfolio from Brisbane-based Suncorp Group, one of Australia's largest banks and insurance companies. Goldman underwrote the $2.913 billion Grand Parkway System Toll Revenue Bond offering for the Houston, Texas area, one of the fastest-growing areas in the United States.

In August 2015, Goldman Sachs agreed to acquire General Electric's GE Capital Bank online deposit platform, including US$ 8 billion of on-line deposits and another US$ 8 billion of brokered certificates of deposit. The Investing and Lending segment accounted for 16% of Goldman’s total revenues in 2015. In April 2016, Goldman Sachs launched GS Bank, a direct bank. In October 2016, Goldman Sachs Bank USA started offering no-fee unsecured personal loans under the brand Marcus by Goldman Sachs. Goldman Sachs offers asset management, mergers and acquisitionsMergers Acquisitions M&A ProcessThis guide takes you through all the steps in the M&A process. It is headquartered at 200 West Street in Lower Manhattan in New York (image below) and operates offices in over 30 countries as of December 30, 2016. In fact, according to a 2016 settlement the company reached with the United States Department of Justice, Goldman Sachs fraudulently underwrote and issued many of those mortgages despite knowing the risks involved.

On September 10, 2018, Goldman Sachs acquired Boyd Corporation from Genstar Capital for $3 billion. Market rumours began swirling about Goldman Sachs’ interest in Bitcoin and other cryptocurrencies in early 2018 when it hired former Seven Eight Capital Vice President Justin Schmidt to look into the possibility of opening a Bitcoin trading desk. About Money, CheckMoneyCheck is a fast-growing online publication launched in 2018 with the aim of covering personal finance and investment news. Our goal is to simplify and explain in clear language, what can be a confusing jumble of terms and concepts.

On May 16, 2019, Goldman Sachs acquired United Capital Financial Advisers, LLC for $750 million. In May 2019, the company opened its third-largest global office, in Bangalore. In December 2019, the company pledged to give $750 billion to climate transition projects and to stop financing for oil exploration in the Arctic and for some projects related to coal.

In June 2020, Goldman Sachs introduced a new corporate typeface, Goldman Sans, and made it freely available. In July 2020, Goldman Sachs agreed on a $3.9 billion settlement in Malaysia for criminal charges related to the 1MDB scandal. In August 2021, Goldman Sachs announced that it had agreed to acquire NN Investment Partners, which had US$335 billion in assets under management, for €1.7 billion from NN Group.


Mission

"We aspire to be the world’s most exceptional financial institution, united by our shared values of client service, excellence, partnership, and integrity.

Drawing on over 150 years of experience working with the world’s leading businesses, entrepreneurs, and institutions, we mobilize our people, culture, technologies, and ideas to advance the success of our clients, broaden individual prosperity, and accelerate economic progress for all."


Vision

"Our purpose comes to life through our four core values: Client Service, Excellence, Partnership, and Integrity.

Client Service
We lead with a service mindset, working to earn our clients’ trust and exceed their expectations by understanding and overdelivering on their goals.

Excellence
We aspire to nothing less than excellence, striving for exceptional performance and superior results for our clients, our shareholders, and our communities.

Partnership
We prioritize collaboration and believe in the strength of the collective, creating a culture that fosters teamwork and belonging in the pursuit of professional and personal growth.

Integrity
We hold ourselves accountable to the highest ethical standards, insisting on transparency and vigilance from our people as we learn from our experiences and make decisions that instill a sense of pride in our firm."


Key Team

Brian J. Lee (Chief Risk Officer)

David A. Viniar (Board Member)

John E. Waldron (President and Chief Operating Officer)

Denis P. Coleman III (Chief Financial Officer)

John F. W. Rogers (Executive Vice President, Chief of Staff)

Fiona Carter (Chief Marketing Officer)

Richard Friedman (Board Member)

Sheara J. Fredman (Chief Accounting Officer)

Stephanie Cohen (Global Co-Head of Consumer and Wealth Management and A Member of The Management Committee)


Recognition and Awards
Fortune 500, Fortune Global 500, Fortune: Best Workplaces, Fortune: Most Admired Companies, Forbes: Most Valuable Brands - Goldman Sachs has been recognised for its commitment to business and innovation, sustainability, diversity, equity and inclusion, and being an employer of choice. In December 2021, Goldman Sachs was awarded the Best Personal Loans From Big Banks by CNBC. In 2021, Money Inc. named Goldman Sachs' investment app as one of the Best Investment Apps of 2021.

Products and Services
  • Asset Management. 
  • Ayco Personal Financial Management.
  • Comprehensive Solutions for Nonprofits. 
  • Embedded Consumer Finance.
  • FICC and Equities. 
  • Financial Cloud.
  • Global Investment Research.
  • Investment Banking.

References
Goldman Sachs
Leadership team

Marcus Goldman (Founder)

Samuel Sachs (Founder)

Industries

Financial and Banking

Number of Employees
20,000 - 50,000
Headquarters
20 west Street NewYork U. S.
Established
1869
Company Type
Public Limited Company
Company Registration
SEC CIK number: 0000886982
Net Income
Above - 20B
Revenue
Above - 1B
Traded as
GS
Social Media

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