'Goldman Sachs' is explained in detail and with examples in the Banking edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.
Goldman Sachs is an American based investment bank. The global company proves to be among the largest and most successful securities, investment banking, and investment management firms. It delivers an extensive variety of financial services to a client base that is diverse and significant. Among its clientele are financial institutions, corporations, individuals, and governments.
The group was founded in 1869. Its headquarters remain in New York City. Goldman Sachs’ keeps offices in all of the important worldwide financial centers. Their office network spans over 35 countries and employs almost 35,000 staff. For 2015, the company boasted profits of $8.77 billion on revenues amounting to $39.2 billion. Goldman operates in four groups which include Investment Banking, Institutional Client Services, Investing and Lending, and Investment Management.
With the Investment Banking group, Goldman Sachs offers an impressive array of services for investment banking to a varied client base of financial institutions, corporations, governments, and investment funds. These services cover a broad range of needs. Among them are equity and debt underwriting for private placements and public offerings.
The firm also provides strategic advice for divestures, mergers and acquisitions, restructurings, corporate defense activities, risk management, and spin offs. They offer international and local financing of acquisitions and transactions along with relevant derivative transactions. In the year 2015, this group earned revenues of $7 billion.
The Institutional Client Services division works with the group’s large institutional clients. They make markets for a number of investments such as equity, fixed income, commodities, and currency pairs on behalf of these clients which include governments, investment funds, corporations, and financial institutions. The group clears transactions for clients via important futures, options, and stock market exchanges around the world. They deliver prime brokerage services, securities lending, and financing for these customers as well. This segment showed revenues of $15.2 billion for 2015, making it twice as large as the next biggest group.
The Investing and Lending operations finance their clients. This includes both originating loans and investing in them. This longer term loan and investment operation covers private and public equity securities, real estate, and loans and debt securities. They make these both directly and indirectly through outside funds. For year 2015, the segment earned $5.4 billion in revenues.
Investment Management operations delivers investment products and services mostly via commingled and separately managed accounts. This includes private investments and mutual funds in all of the important asset classes. They offer these services to both wealthy individual and institutional clients. They also provide high net worth families and individuals with advisory services for their wealth. This includes financial counseling, portfolio management, and brokerage transaction services. In 2015, this segment earned $6.2 billion.
Goldman Sachs suffered dramatically from the 2008 financial crisis because of its heavy involvement with subprime mortgages. The U.S. government had to rescue the group to keep it from failing. They had to convert to a traditional bank with Federal Reserve oversight. Since then, it has massively returned to profitability and repaid its loans.
There are numerous important alumnus among the one time Goldman Sachs executives. These include former Treasury Secretaries like Henry Paulson and Robert Rubin, current European Central Bank President Mario Draghi, and Mark Carney the current Governor of the Bank of England.