Goldman Sachs provides a range of investment banking and wealth management services to corporations and high-net-worth individuals, with to helping them grow and effectively utilise their finances.
Goldman Sachs organises its business into four operating segments
Investment Banking, which provides financial advisory services and assists companies in raising capital to strengthen and grow their businesses, including the provision of debt and equity underwriting services;
Institutional Client Services, which buys and sells financial products, raises funding and manages risk for large institutions;
Investing and Lending, which is engaged in lending activities across various asset classes, primarily debt securities and loans, public and private equity securities, and real estate, and invests directly in publicly and privately traded securities and in loans; and
Investment Management, which provides investment management and wealth advisory services to help clients preserve and grow their financial assets.
Goldman Sachs was founded in 1869 by Marcus Goldman. The Company initially operated as a small commercial paper business out of a one-room office in New York. In the early 1900s, Goldman Sachs entered the burgeoning public trading business, handling the initial equity sales of Sears, and Roebuck and Company.
In 1929 Goldman Sachs made considerable investment losses, due largely to the stock market collapse. The Company’s operations slumped considerably, and in 1930 it was taken over by Sidney Weinberg who began rebuilding the Company as an investment banking business. By the 1950s Goldman Sachs was again a leading player in the public trading markets, underwriting the initial public offering of Ford Motor Company in 1956. Goldman Sachs has continued to expand, growing its international presence and establishing a leading mergers and acquisitions advisory business.
Today, Goldman Sachs is one of the largest banking institutions in the world, with operations across major financial hubs in the Americas, Asia, Europe, the Middle East, and Africa. It employs a global workforce of close to 37,000 employees and generates tens of billions in annual revenue. The Company is placed 74th and 77th respectively in the Fortune 500 and Forbes Global 2000 lists.
Goldman trades its shares on the New York Stock Exchange and has a market capitalisation of $68.93 billion.
Business model of Goldman Sachs
Goldman Sachs provides banking and financial services to a range of clients. The Company’s operating segments target a variety of customers segments:
Investment Banking, which serves a range of public and private sector clients worldwide;
Institutional Client Services, which principally serves clients that are professional market participants, including investment entities whose ultimate customers include individual investors investing for their retirement, buying insurance or putting aside cash in a deposit account.
Investing and Lending, which serves a range of individual and corporate clients; and
Investment Management, which serves institutional clients and high-net-worth individuals.
Goldman Sachs reports its revenue in three geographic segments, serving clients across the Americas, Europe, the Middle East, and Africa, and Asia.
Goldman Sachs provides value to its clients in the followings ways:
Its industry standing and brand reputation, with the Company recognised as one of the largest and most influential banking institutions in the world, with a certain associated with being among the Company’s clients;
Industry experience and technical expertise, with the Company committed to employing highly-qualified and technically competent staff and experienced industry executives;
Its track record for providing effective and reliable services, with the Company having reliably provided a range of banking services to high-profile clients for many years supported by its Global Investment Research Division; and
Its size and reach, with the Company reaching clients across the Americas, Asia, and Africa, the Middle East, and Africa, and maintaining a physical presence across major cities worldwide.
Goldman Sachs operates a website at www.goldmansachs.com, through which it provides information to clients on its services and activities. The Company does not have an online sales channel, however, according to its annual report, it does utilise certain technology platforms in order to maintain connectivity with its clients.
Goldman Sachs primarily provides its services to clients directly through its global sales force, which operates through the Company’s network of offices across more than 30 countries, spanning the Americas, Asia, Europe, Africa, and the Middle East.
Goldman Sachs also provides some services, notably funding products, through a network of authorised third-party distributors that serve a diverse creditor base in a variety of markets in the Americas, Europe and Asia.
Goldman Sachs does not provide services to clients on a self-service basis. The complex nature of its activities require that the Company’s sales force maintains close relationships with its clients, distributing investment research, trading ideas, and providing market information and analysis to customers on a regular basis. The Company seeks to establish long-term and closely connected relationships with its clients, providing a bespoke and personalised service.
Goldman Sachs provides a range of online resources to its clients, including FAQs and guides, transmitting more in-depth technical information to clients through its press and news releases, market insight reports, speaking events, and regulatory papers. Customers can also contact the Company directly over the phone and via email to receive personalised assistance and advice.
Customers are also able to interact directly with Goldman Sachs through its social media accounts, including with LinkedIn, Twitter, Google+, and YouTube.
Goldman Sachs is a banking and financial holding company.
The Company organises its operations into four business segments: Investment Banking, which provides financial advisory services, such as advisory assignments regarding mergers and acquisitions, divestitures, corporate activities, restructurings, and risk management; Institutional Client Services, which facilitates client transactions in fixed income, equity, currency and commodity products; Investing and Lending, which is engaged in certain investing and lending activities across a range of asset classes, primarily debt securities and loans, public and private equity securities, and real estate; and Investment Management, which provides investment and wealth advisory services.
Goldman Sachs utilises the activities of various partners throughout the process of delivering its own products and services. These partners include:
Academic Partners, comprising a range of academic institutions such as universities and colleges, as well as research institutes, that assist the Company in developing products and initiatives;
Non-Profit and Advisory Partners, comprising charitable organisations and advisory bodies that assist the Company in operating in compliance with relevant regulations and frameworks; and
Distribution Partners, comprising financial service providers that assist in providing certain Goldman Sachs products and services in a number of jurisdictions.
Goldman Sachs’s academic partners include a number of high-profile institutions, such as Oxford University, MIT Sloan School of Business, London Business School, and Harvard Business School. Its non-profit and advisory partners include Acumen Fund, Africa America Institute, and World Bank.
Goldman Sachs’s key resources are its financial resources, its physical network of offices, its IT infrastructure, its partnerships, and its personnel. The Company employs a range of communications and technology systems as a key part of its operations, enabling it to complete financial actions quickly and efficiently. It is also important to the Company that it maintains a physical presence in key financial hubs worldwide – including in New York, London, and Dubai – so it is able to interact in person with high-profile clients.
Searches of records published by the US Patent and Trademark Office identified a number of patent applications filed in the name of Goldman Sachs, including applications entitled ‘Identity-independent authentication tokens’, System and method for identifying billing errors’ and ‘Model-based selection of trade execution strategies’.
Goldman Sachs incurs costs in relation to the operation of its physical network of offices, the maintenance of its IT and communications infrastructure, the implementation of market development schemes, the payment of professional and banking fees, and the retention of its personnel.
In 2015 Goldman Sachs accrued operating expenses in the amount of $25.04 billion. This included brokerage, clearing, exchange and distribution fees totaling 2.58 billion, professional fees amounting to $963 million, and occupancy costs in the amount of $772 million. The Company’s most significant expenses related to its payment of salaries and benefits to its 36,800 employees, which totalled $12.68 billion.
Goldman Sachs generates revenue through the provision and sale of various banking and financial services and products. This principally comprises revenue derived from the sale of products, as well as commissions on services its provides, including but not limited to fees received in relation to financial counseling, wealth advisory services, administration of real estate assets, executing and clearing institutional client transactions.
In 2015 Goldman Sachs generated annual revenue of $33.82 billion, down slightly on the $34.53 billion recorded by the Company in 2014. The Company’s investment banking and market making activities generate the largest portion of the Company’s revenue, accounting respectively for $7.03 billion and $9.52 billion in revenue in 2015.
Chairman and Chief Executive Officer
info: Lloyd (“Blankfein”) has served as Chairman and Chief Executive Officer of Goldman Sachs since 2006, and has been a director of the Company since 2003. He also sits on the Company’s Management Committee.
Blankfein has been with Goldman Sachs since the 1980s, initially working within the Company’s commodities trading arm as a precious metals salesman. From 1994 he served as Co-Head and Head of its Currency and Commodities Division. From 1997 he served as Co-head of Goldman Sachs’s Fixed Income, Currency and Commodities Division, going on to serve as Vice Chairman of the Company, taking responsibility Fixed Income, Currency and Commodities Division the and Equities Division. Prior to assuming his current position, he served for a spell as Chief Operating Officer. Prior to joining Goldman Sachs, Blankfein worked for Proskauer Rose, and Donovan, Leisure, Newton, and Irvine.
President and Chief Operating Officer
info: Gary (“Cohn”) was appointed President and Chief Operating Officer at Goldman Sachs in 2006. He also serves as a member of the Goldman Sachs Management Committee and its Board of Directors.
Cohn is a long-serving Goldman Sachs employee, having been with the Company for more than 25 years. He joined the Company in 1990 and began taking on senior leadership roles in 1994, when he was made a partner. From 1996 to 2002 Cohn served as Head of the Fixed Income, Currency and Commodities Division, going on to serve as Co-Head of the Global Securities Businesses from 2003 to 2006. Prior to assuming his role as President and Chief Operating Officer, Cohn served as Co-Chief Operating Officer of Fixed Income, Currency and Commodities.
Executive Vice President and Chief Financial Officer
info: Harvey (“Schwartz”) has served as Goldman Sachs’s Executive Vice President and Chief Financial Officer since 2013, having previously served as the Company’s Global Co-Head of the Securities Division. He is also a member of the Company’s Management Committee, Firmwide Risk Committee, and Firmwide Investment Policy Committee.
Schwartz has held a number of senior positions at Goldman Sachs, including spells as Global Head of the Securities Division Sales, Head of North America Sales, and Co-Head of the Americas Financing Group within Investment Banking. Schwartz began his career at J B Hanauer and Company, later moving to First Interregional Equity Corporation, and then Citicorp before joining Goldman Sachs.