Full Description

The Goldman Sachs Group, Inc. (Goldman Sachs) is a bank holding company and global investment banking, securities and investment management firm that provides services worldwide to corporations, financial institutions, governments and high-net-worth individuals. Its activities are divided into three segments: Investment Banking, Trading and Principal Investments, and Asset Management and Securities Services. On December 11, 2007, Credit-Based Asset Servicing and Securitization LLC, a sub-prime mortgage investor, completed the sale of its Litton Loan Servicing business to Goldman Sachs. In May 2008, MBF Healthcare Partners, LP and Goldman Sachs announced the acquisition of OMNI Home Care (OMNI), a provider of skilled nursing and therapy home healthcare services. MBF Healthcare Partners, LP and Goldman Sachs will share joint ownership of OMNI. In June 2008, its division, Goldman Sachs Urban Investment Group, and Cordova, Smart & Williams, LLC announced the acquisition of H2O Plus, LLC.

Investment Banking

Goldman Sachs provides a range of investment banking services to a diverse group of corporations, financial institutions, investment funds, governments and individuals. Its Investment Banking segment is divided into two components: Financial Advisory and Underwriting.

Financial Advisory includes advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense activities, restructurings and spin-offs. Underwriting includes public offerings and private placements of a range of securities and other financial instruments, including common and preferred stock, convertible and exchangeable securities, investment-grade debt, high-yield debt, sovereign and emerging market debt, municipal debt, bank loans, asset-backed securities and real estate-related securities, such as mortgage-related securities and the securities of real estate investment trusts.

Goldman Sachs engages in the underwriting and origination of various types of debt instruments, including investment-grade debt securities, high-yield debt securities, bank and bridge loans and emerging market debt securities, which may be issued by, among others, corporate, sovereign and agency issuers. In addition, it underwrites and originates structured securities, which include mortgage-related securities and other asset-backed securities, and collateralized debt obligations.

Trading and Principal Investments

Trading and Principal Investments facilitates client transactions with a group of corporations, financial institutions, investment funds, governments and individuals and takes positions through market making in, trading of and investing in fixed income and equity products, currencies, commodities and derivatives on these products. In addition, the Company engages in market making and specialist activities on equities and options exchanges, and it clears client transactions on major stock, options and futures exchanges worldwide. In connection with its merchant banking and other investing activities, Goldman Sachs makes principal investments directly and through funds that it raises and manages. The Company’s Trading and Principal Investments segment is divided into three components: Fixed Income, Currency and Commodities; Equities, and Principal Investments.

Fixed Income, Currency and Commodities (FICC) and Equities are large and diversified operations, through which Goldman Sachs engages in a variety of customer-driven, and trading and investing activities. The Company’s FICC and Equities businesses operate in close coordination to provide clients with services and cross-market knowledge and expertise.

Goldman Sachs makes markets in and trade interest rate and credit products, mortgage-related securities and loan products and other asset-backed instruments, currencies and commodities, structure and enters into a variety of derivative transactions, and engages in trading and investing. FICC has five principal businesses: commodities; credit products; currencies; interest rate products, including money market instruments, and mortgage-related securities and loan products and other asset-backed instruments.

The Company enters into trades with its clients in, make markets in, and trades for its own account a variety of commodities, commodity derivatives and interests in commodity-related assets, including oil and oil products, metals, natural gas and electricity, and forest products. As part of its commodities business, Goldman Sachs acquires and disposes of interests in, and engages in the development and operation of, electric power generation facilities and related activities.

The Company offers to and trades for its clients an array of credit and credit-linked products all over the world, including credit derivatives, investment-grade corporate securities, high-yield securities, bank and secured loans (origination and trading), municipal securities, and emerging market and distressed debt. In addition, Goldman Sachs provides credit through bridge and other loan facilities to a range of clients. Goldman Sachs credit products business includes making long-term and short-term investments for its own account (sometimes investing together with its merchant banking funds) in an array of asset classes (including distressed debt) globally. It invests in debt and equity securities and secured loans, and in private equity, real estate and other assets.

Goldman Sachs acts as a dealer in foreign exchange and trade for its clients and itself in most currencies on exchanges and in cash and derivative markets globally. The Company trades and makes markets in a variety of interest rate products, including interest rate swaps, options and other derivatives, and government bonds, as well as money market instruments, such as commercial paper, treasury bills, repurchase agreements and other highly liquid securities and instruments. This business includes its matched book, which consists of short-term collateralized financing transactions.

The Company makes markets in and trade for its clients and itself commercial and residential mortgage-related securities and loan products (including agency prime and non-agency prime, Alt-A and subprime mortgages) and other asset-backed and derivative instruments. It acquires positions in these products for trading purposes, as well as for securitization or syndication. Goldman Sachs also originates and services commercial and residential mortgages. The Company makes markets in and trade equities and equity-related products, structure and enter into equity derivative transactions, and engage in trading. Equities includes two principal businesses: the Company’s client franchise business and principal strategies. Goldman Sachs also engages in specialist and insurance activities.

The Company’s client franchise business includes primarily client-driven activities in the shares, equity derivatives and convertible securities markets. These activities also include clearing client transactions on major stock, options and futures exchanges worldwide, as well as its options specialist and market-making businesses. The Company’s client franchise business involves providing its clients with access to electronic low-touch equity trading platforms, and electronic trades now account for the majority of its client trading activity in this business. Goldman Sachs trades equity securities and equity-related products, including convertible securities, options, futures and over-the-counter (OTC) derivative instruments, on a global basis as an agent, as a market maker or otherwise as a principal.

In the options and futures markets, Goldman Sachs structures, distributes and executes derivatives on market indices, industry groups, financial measures and individual company stocks to facilitate client transactions and its activities. The Company develops strategies and renders advice with respect to portfolio hedging and restructuring and asset allocation transactions. It also creates specially tailored instruments to enable investors to undertake hedging strategies and to establish or liquidate investment positions.

The Company’s principal strategies business is a multi-strategy investment business that invests and trades its capital across global markets. The Company’s specialist activities business consists of its stock and exchange-traded funds (ETF) specialist and market-making businesses. Goldman Sachs engages in specialist and market-making activities on equities exchanges. Through its insurance subsidiaries, Goldman Sachs engages in a range of insurance and reinsurance businesses, including buying, originating and/or reinsuring variable annuity and life insurance contracts, reinsuring property catastrophe and residential homeowner risks and providing power interruption coverage to power generating facilities. Principal Investments primarily represents net revenues from four primary sources: returns on corporate and real estate investments, overrides on corporate and real estate investments made by merchant banking funds that it manages, and the Company’s investment in the ordinary shares of Industrial and Commercial Bank of China Limited (ICBC).

Asset Management and Securities Services

The Company’s asset management business provides investment advisory and financial planning services and offers investment products (primarily through separately managed accounts and commingled vehicles) across all major asset classes to a diverse group of institutions and individuals worldwide and primarily generates revenues in the form of management and incentive fees. Securities Services provides prime brokerage services, financing services and securities lending services to institutional clients, including hedge funds, mutual funds, pension funds and foundations, and to high-net-worth individuals worldwide, and generates revenues primarily in the form of interest rate spreads or fees. The Company’s Asset Management and Securities Services segment is divided into two components: Asset Management and Securities Services.

Goldman Sachs offers an array of investment strategies, advice and planning. It provides asset management services and offer investment products (primarily through separately managed accounts and commingled vehicles, such as mutual funds and private investment funds) across all asset classes: money markets, fixed income, equities and alternative investments (including hedge funds, private equity, real estate, currencies, commodities and asset allocation strategies). Through its subsidiary, The Ayco Company, L.P. (Ayco), Goldman Sachs also provides fee-based financial counseling and financial education in the United States.

Securities Services provides prime brokerage services, financing services and securities lending services to institutional clients, including hedge funds, mutual funds, pension funds and foundations, and to high-net-worth individuals worldwide. Goldman Sachs offers prime brokerage services to its clients, allowing them to trade with most brokers while maintaining a single source for financing and consolidated portfolio reports. The Company’s prime brokerage business provides clearing and custody in 53 markets and provides consolidated multi-currency accounting and reporting, fund administration and other ancillary services. A central element of the Company’s prime brokerage business involves providing financing to its clients for their securities trading activities through margin and securities loans that are collateralized by securities, cash or other acceptable collateral.

Securities lending services principally involves the borrowing and lending of securities to cover clients’ and Goldman Sachs’ short sales and otherwise to make deliveries into the market. In addition, Goldman Sachs is a participant in the broker-to-broker securities lending business and the third-party agency lending business.