investment management industry

Goldman Sachs is a well-known name in the investment banking, securities, and investment management industry.

About the Company

It is a global investment bank and financial services company. It was established in 1869 and has regional offices in Warsaw, London, Bangalore, Hong Kong, Salt Lake City, and Tokyo in addition to offices located in other major global financial hubs.

The company has its headquarters in Manhattan, New York. As per revenue, it is the second-biggest investment bank in the world. It is also placed 57th among the 500 largest American companies on the Fortune 500 list.

History of the Company

Marcus Goldman established Goldman Sachs in 1869 in New York City. Samuel Sachs, the son-in-law of Goldman, started working there in 1882. Goldman brought his son Henry and son-in-law Ludwig Dreyfuss into the company in 1885, and the company then took on its current name, Goldman Sachs & Co. The company entered the NYSE in1896 and was a pioneer in the utilization of commercial paper for business transactions.

The company’s capital was $1.6 million in 1898. By putting Sears, Roebuck, and Company on the public market in 1906, Goldman debuted the IPO market. Henry Goldman’s personal acquaintance with Sears owner Julius Rosenwald made the deal possible. Continental Can and F. W. Woolworth were among the next companies to go public.

Henry S. Bowers was the first person outside of the founding family to join the company as a partner and get a portion of the earnings in 1912. Henry Goldman resigned from the firm in 1917 as a result of mounting pressure from his fellow partners over his pro-German stance. Before Waddill Catchings joined the corporation in 1918, the Sachs family had complete control of the business. Waddill Catchings was Goldman Sachs’s partner with the single-largest ownership position in the company by 1928.

In 1928, the company introduced the closed-end fund Goldman Sachs Trading Corp. During the 1929 stock market crash, the fund failed amid claims that Goldman had been involved in insider trading and share price manipulation. Goldman Sachs opened its first overseas office in London, United Kingdom, in 1970. To increase its presence in the UK, it also established a fixed income and private wealth unit in 1972.

It bought the commodities trading business J. Aron & Company in 1981, traded in coffee, precious metals, and foreign exchange. Through the acquisition, it was able to get access to the market in South America which boosted the company’s growth in subsequent years. It established Goldman Sachs Asset Management in 1986, a business that still oversees its hedge and mutual funds today.

Goldman Sachs was one of the companies that profited from the U.S. Treasury’s rescue of financial institutions during the financial crisis as a component of the Troubled Asset Relief Program (TARP). The US Treasury invested $10 billion in the company in 2008. In the type of $318 million in dividends and $1.418 billion in warrant redemptions, Goldman reimbursed the money with a 23% interest.

Services Offered

Goldman Sachs offers services in areas like investment banking (advice for acquisitions and mergers and reorganization), securities underwriting, asset and wealth management, and prime brokerage. It also trades credit products and mortgage-backed and insurance-linked assets. It is a key trader in the market for Treasury securities issued by the United States.

It offers custodian bank and clearing services. Goldman Sachs Personal Financial Management, offers wealth management services. It runs hedge funds, real estate and credit funds, and private equity funds. It builds sophisticated, specialized financial products. Additionally, it owns a direct bank Goldman Sachs Bank USA. It trades both for its own account and on behalf of the customers (flow trading).

Founder: Marcus Goldman, Samuel Sachs

Marcus Goldman was an American banker, entrepreneur, and financier. Goldman Sachs, which he founded, is now among the biggest investment firms in the world. Goldman changed the company’s name to M. Goldman & Sachs in 1882 and extended an invitation to his son-in-law Samuel Sachs to assist him in the company.