Profile: Goldman Sachs Group Inc (GS.N)
17 May 2013
The Goldman Sachs Group, Inc. (Goldman Sachs), incorporated on July 21, 1998, is a global investment banking, securities and investment management firm that provides a range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Goldman Sachs operates in four segments: Investment Banking, Institutional Client Services, Investing & Lending and Investment Management. As of December 2012, it had offices in over 30 countries, including offices in all major financial centers worldwide.
Investment Banking serves corporate and government worldwide. The Company provides financial advisory services. It serves institutional clients, including governments, states and municipalities. Financial Advisory includes strategic advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense activities, risk management, restructurings and spin-offs. The Company provides multiple services, including one-stop acquisition financing and cross-border structuring expertise. It also assists its clients in managing their asset and liability exposures and their capital. In addition, it may provide lending commitments and bank loan and bridge loan facilities in connection with its advisory assignments.
Goldman Sachs’s underwriting activities include public offerings and private placements, including domestic and cross-border transactions, of a wide range of securities and other financial instruments. Underwriting also includes revenues from derivative transactions entered into with corporate and government clients in connection with its underwriting activities. The Company underwrites common and preferred stock and convertible and exchangeable securities. It receives mandates for transactions. Goldman Sachs underwrites and originates a range of debt instruments, including investment-grade and high-yield debt, bank loans and bridge loans, and emerging- and growth-market debt, which may be issued by, among others, corporate, sovereign, municipal and agency issuers. In addition, it underwrites and originates structured securities, which include mortgage-related securities and other asset-backed securities.
Institutional Client Services
Institutional Client includes fixed income, currency and commodities and client execution. Equity includes equity client execution, commissions and fees, and securities services. Institutional Client Services serves its clients who come to the firm to buy and sell financial products, raise funding and manage risk. Institutional Client Services makes markets and facilitates client transactions in fixed income, equity, currency and commodity products. In addition, it makes markets in and clear client transactions on stock, options and futures exchanges worldwide. The Company’s clients are primarily institutions that are professional market participants, including investment entities whose customers include individual investors investing for their retirement, buying insurance or putting aside surplus cash in a deposit account.
Through the Company's global sales force, it maintains relationships with its clients, receiving orders and distributing investment research, trading ideas, market information and analysis. As a market maker, it provides prices to clients globally across thousands of products in all asset classes and markets. Institutional Client Services and its other businesses are supported by its Global Investment Research division. As of December 2012, its Global Investment Research division provided fundamental research on more than 3,700 companies worldwide and over 40 national economies, as well as on industries, currencies and commodities.
Institutional Client Services generates revenues in four way: In liquid markets (such as markets for U.S. Treasury bills, large capitalization S&P 500 stocks or certain mortgage pass-through securities); In less liquid markets (such as mid-cap corporate bonds, growth market currencies or certain non-agency mortgage-backed securities); it also structure and execute transactions involving customized or tailor-made products that address its clients’ risk exposures, investment objectives or other needs (such as a jet fuel hedge for an airline), and it provides financing to its clients for their securities trading activities, as well as securities lending and other prime brokerage services.
Institutional Client Services activities are organized by asset class and include both cash and derivative instruments. Cash includes trading the underlying instrument (such as a stock, bond or barrel of oil). Derivative includes instruments that derive their value from underlying asset prices, indices, reference rates and other inputs, or a combination of these factors (such as an option, which is the right or obligation to buy or sell a certain bond or stock index on a specified date in the future at a certain price, or an interest rate swap, which is the agreement to convert a fixed rate of interest into a floating rate or vice versa).
Interest Rate products includes government bonds, money market instruments, such as commercial paper, treasury bills, repurchase agreements and other liquid securities and instruments, as well as interest rate swaps, options and other derivatives. Credit products include investment-grade corporate securities, high-yield securities, credit derivatives, bank and bridge loans, municipal securities, emerging market and distressed debt, and trade claims. Mortgages includes commercial mortgage-related securities, loans and derivatives, residential mortgage-related securities, loans and derivatives (including United States government agency-issued collateralized mortgage obligations, other prime, subprime and Alt-A securities and loans), and other asset-backed securities, loans and derivatives. Currencies include currencies, including growth-market currencies. Commodities include oil and natural gas, base, precious and other metals, electricity, coal, agricultural and other commodity products. Goldman Sachs makes markets in equity securities and equity-related products, including convertible securities, options, futures and over-the-counter (OTC) derivative instruments, on a global basis.
The Company also structures and executes derivatives on indices, industry groups, financial measures and individual company stocks. The Company develops strategies and provides information about portfolio hedging and restructuring and asset allocation transactions for its clients. Goldman Sachs also works with its clients to create specially tailored instruments to enable investors to establish or liquidate investment positions or undertake hedging strategies. It is a participant in the trading and development of equity derivative instruments. The Company’s exchange-based market-making activities include making markets in stocks and exchange-traded funds.
In the United States, Goldman Sachs is a Designated Market Maker (DMM) for stocks traded on the NYSE, a registered market maker for exchange traded funds (ETFs), on NYSE Arca, a market maker in listed options on the International Securities Exchange, the Chicago Board Options Exchange, NYSE Arca, the Boston Options Exchange, the Philadelphia Stock Exchange, the Miami Options Exchange and NYSE MKT, and a market maker in futures and options on the Chicago Mercantile Exchange and the Chicago Board of Trade. The Company provides financing to its clients for their securities trading activities through margin loans that are collateralized by securities, cash or other acceptable collateral. It provides financing to its clients for their securities trading activities through margin loans that are collateralized by securities, cash or other acceptable collateral.
Investing & Lending
The Company’s investing and lending activities, which are longer-term, include the firm’s investing and relationship lending activities in range of asset classes, primarily debt securities and loans, public and private equity securities, and real estate. These activities include investing directly in publicly and privately traded securities and in loans, and also through certain investment funds that it manage. The Company manages a diversified global portfolio of investments in equity securities and debt and other investments in privately negotiated transactions, leveraged buyouts, acquisitions and investments in funds managed by external parties. It also provides financing to its clients.
The Company makes corporate, real estate and infrastructure debt investments. In addition, it provides credit to corporate clients through loan facilities and to high-net-worth individuals primarily through secured loans. The Company’s other investments primarily include its consolidated investment entities, which are entities it hold for investment purposes strictly for capital appreciation.
Investment Management provides investment and wealth advisory services. Goldman Sachs’s clients include institutions and high-net-worth individuals, as well as retail investors who access its products through a network of third-party distributors around the world. The Company manages client assets across a range of asset classes and investment strategies, including equity, fixed income and alternative investments. The Company’s investment offerings include those managed on a fiduciary basis by its portfolio managers as well as strategies managed by third-party managers. The Company offers its investments in a range of structures, including separately managed accounts, mutual funds, private partnerships, and other commingled vehicles.
The Company also provides customized investment advisory solutions designed to address its clients’ investment needs. These solutions begin with identifying clients’ objectives and continue through portfolio construction, ongoing asset allocation and risk management and investment realization. The Company draws from a range of third-party managers as well as its offerings to implement solutions for clients. The Company supplements its investment advisory solutions for high-net-worth clients with wealth advisory services that include income and liability management, trust and estate planning, philanthropic giving and tax planning. The Company also uses the firm’s global securities and derivatives market-making capabilities to address clients’ specific investment needs.
Revenues in management and other fees are consists of asset-based fees on client assets. Other fees it receives include financial counseling fees generated through its wealth advisory services and fees related to the administration of real estate assets. Assets under supervision include assets under management and other client assets. This includes net assets in its mutual funds, hedge funds, credit funds and private equity funds (including real estate funds), and separately managed accounts for institutional and individual investors.
Goldman Sachs Group Inc
200 West Street
NEW YORK NY 10282