The Goldman Sachs Group, Inc'

1
The Goldman Sachs Group, Inc.
Goal is to assist clients with the tools and
services needed to decrease administrative
burdens of managing money to allow them to focus
on increasing trading performance, building their
business and attracting new sources of capital
Mission Statement
Marcin Ferenc, Victoria OConnor, Lisa Brill, Tom
Iadanza, Jay Lee, Michael Quijano, Anthony
Sorrentino
2
Company Overview

• Founded in 1869, been providing investment
  banking, securities, and investment management
  services to corporations, government, and
  high-net-worth individuals worldwide
• operates in about 25 different countries and the
  United States.
• Investment Banking, Trading and Principal
  Investments, and Asset Management and Securities
  Services.
• The main headquarters for the company are located
  in New York, New York.

3
Company Size

• In 2006, earned 9.54 Billion within the United
  States
• Earnings per share were 19.69
• Total Compensation per employee was 622,000
• 13 of revenues came from investing on its own
  behalf
• Goldman Sachs had total revenue of 37.7 billion
• 9.54 billion as its total profit

4
Revenues (millions) for Year
Earnings per share () for Year
5
Employees and Revenue

• Goldman Sachs employed 26,500 people
• New York division maintains 13,000 employees
• Investment Banking makes up for 5.6 billion in
  revenues
• Trading and Investing portion produces 25.6
  billion revenues
• Asset Management acquires 6.5 billion in
  revenues

6
Services

• Investment banking
• Organizes transactions for corporations,
  financial institutions, and governments
• -mergers, acquisitions, divestitures, the
  issuance of equity or debt capital, or a
  combination of these
• global relationships combined with its
  understanding of local economies, industries and
  cultures help to assist with elite advice and
  service consistently
• Trading Division
• Trading and Principal Investment
• speeds up customer transactions and takes
  aptness positions through market making, trading
  of fixed income and equity products, currencies,
  commodities and swaps and other derivatives
• The Trading and Principal Investments activities
• Fixed Income, Currency and Commodities, Equities
  and Principal Investments

7
Services

• Asset Management
• Deals with the investment necessities of
  institutions, governments and government agencies
  globally
• A strong understanding in local economies,
  industries and cultures facilitates a global
  relationship which assists in assuring customers
  of their wants being access to investment
  opportunities, consistent, risk-adjusted
  performance, and solid and consistent returns
• Resources and Relationship and In-Depth Research
• Resources and Relationships have offices in the
  United States, London and Tokyo where they offer
  access to portfolio management teams on-site and
  globally
• In-Depth Research has a stronghold on research
  stems through cautious gathering of information
  and perspectives which facilitates knowledgeable
  decision making and objective of solid,
  consistent returns

8
Services

• Securities Services
• Securities services include Global Securities
  Services which is a group pertaining to Prime
  Brokerage, Securities Lending, Futures Services
  and Financing Services with a varying and global
  client base
• Securities services include Global Securities
  Services which is a group pertaining to Prime
  Brokerage, Securities Lending, Futures Services
  and Financing Services with a varying and global
  client base. Goldman Sachs also offers a Prime
  Brokerage product
• The Goldman Sachs Securities Lending programs
  give clients an opportunity to create incremental
  revenues through low risk and well-understood
  transactions

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Services

• Fixed Income, Currency and Commodities
• makes markets in and trades interest rate and
  credit products, currencies and commodities,
  structures and works with a wide range of
  derivative transactions and proprietary trading
• main products are commodities and commodity
  derivatives, credit products which include
  investment-grade corporate securities, high-yield
  securities, bank loans, municipal securities,
  credit derivatives, emerging market debt,
  currencies and currency derivatives, interest
  rate products, money market instruments and
  mortgage-backed securities and loans
• deals with equities which makes markets in, acts
  as a specialist for and trades equities, it
  arranges and deals with equity derivative
  transactions and works in proprietary trading

10
Services

• Risk Management
• Division which primarily delivers favorable
  returns compared to the market
• Goldman Sachs client base looks to risk
  management to create performance dependable with
  their forbearance to risk
• The company provides clients with mutual funds
  and asset management products in addition to
  specialized services for their institutional
  investors
• Goldman Sachs looks to provide clients with
  global capabilities, flexible technology
  solutions and easy access to information.

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Major Subsidiaries

• Goldman Sachs International
• Cogentrix Energy
• GS Capital Partners
• Goldman Sachs (Asia) Finance
• Goldman Sachs (Japan) Ltd.
• Goldman Sachs Canada Inc.
• Goldman Sachs Foreign Exchange (Singapore) Pte.
• Goldman Sachs (UK) L.L.C
• Goldman Sachs Bank USA
• Goldman Sachs Foreign Exchange (Singapore) Pte.

• Goldman Sachs L.L.C
• GS Equity Markets, L.P.
• GS European Performance Fund Limited
• GSCP (DEL) Inc.
• GSGF Investments Inc.
• The Goldman Sachs Group, Inc.
• The Hull Group, L.L.C
• Sargasso Limited
• Menhetia Inc.

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Industry Segment

• Composed of two segments
• investment management
• investment banking and brokerage
• Major reporting segments
• provides different services to clients
• serve the purpose of bringing savers and
  borrowers together
• By pooling the savings of individuals, they
  increase liquidity, improve diversification, and
  reduce transaction costs for investors
• national full-line firms
• large investment banks
• regionals
• New York City based brokers
• discount and online brokers

13
Domestic Competitors
14
Global Competitors

• U.S based investment banks hold top six places in
  the global competitions

• Global investment banks
• Goldman Sachs
• Citigroup
• Morgan Stanley
• JPMorgan Chase
• Merrill Lynch
• Europes Credit Suisse
• UBS AG
• Deutsche Bank

15
Global Competitors
16
Technology

• Advances in technology
• lowered transaction costs
• raised the market
• operating efficiencies
• Client demand for specialized investment products
• new financial product innovations
• new hedging vehicles, derivative products, and
  specialized mutual funds.
• State of the art computers
• do work that humans used to do
• speeds up market response and transaction time

17
Employment

• Investment banks
• hire more employees when market is doing well
• cut back on employment when market is declining.
• Industry health
• employed 803,700 (up 1.7 from 2005)

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Business Segments

• Investment Banking, Asset Management, Trading
• Trading is largest of the three core segments,
  and is company's biggest profit center
• Fixed Income, trading in interest rate and credit
  products, mortgage-backed securities and loans,
  Equities like trading in equities and
  equity-related products and executing client
  trades in equities, and Principal Investments
  like merchant banking investments and funds.

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Investment Banking Segments

• Financial Advisory and public offerings and
  private placements of equity, equity-related and
  debt instruments.
• Leading investment banks in its market
• Mergers and acquisitions
• avoid hostile takeovers
• this segment accounts for around 15 percent of
  Goldman Sachs' revenues

20
Securities Services

• Rapidly growing business as it gains market share
• Asset Management,
• provides large institutions and very wealthy
  individuals with investment advisory, and the
  management of mutual funds.
• The Securities Services
• provides prime brokerage, financing services, and
  securities lending to mutual funds, hedge funds,
  pension funds, and foundations.
• accounts for around 19

21
Economic Growth

• Investment banks
• sales, trading, and merger advisory businesses
  remain strong despite increased market volatility
• Sales and Trading
• generate most of industrys revenues
• Goldman Sachs
• FICC generated net revenues of 4.6 billion
• Equity trading revenues increased 35
• Trading commissions increased 10.

22
Economic Growth

• 2006 and 2007, investment banks had a boost in
  their advisory businesses
• record numbers of global mergers and acquisitions
• surge in leveraged buyout activity

23
Economic Growth

• Private equity firms
• 11 billion in fees to Wall Street investment
  banks
• merger boom increased
• -advisory fees
• -debt lending
• -underwriting fees

24
Globalization

• Globalization
• U.S and European investment banks compete for
  business around the world
• Expand into markets to increase growth or
  competitiveness, and satisfy demand
• Investors are looking to invest globally to
  enhance return and reduce risk
• Markets are opening in developing countries
  allowing investment services companies to serve
  their increasingly wealthy populations.

25
Globalization

• U.S and European investment banks are expanding
  to China
• rapidly growing Chinese market
• Goldman Sachs
• joint venture investment banking company, Goldman
  Sachs Gao Hua Securities
• hold a one third stake which is the maximum
  allowed
• lent 100 million to Fang Fenglei, a Chinese
  dealmaker who set up Gao Hua

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References

• www.GS.com
• www.spiegel.de/international
• Galenet.galegroup.com
• Standard and Poors Net Advantage
• Hoovers Company Records
• Business Company Resource Center
• Finance.yahoo.com
• en.wikipedia.org