The Goldman Sachs Group, Inc.

85 Broad Street

New York, NY 10004

212-902-1000

www.gs.com

 

2003 net revenues: $16.0 billion

2003 net income: $3.0 billion

2003 investment banking revenues: $2.7 billion

2003 debt underwriting revenues: $831 million

 

2003 total capital: $79.1 billion

 

2003 total employees: 19,476 (34% outside the U.S)

 

Chairman and Chief Executive Officer: Henry M. Paulson  

 

Goldman Sachs is a global investment banking, securities and investment management firm that converted from a partnership to a publicly traded company in 1999.

 

History

In 1869, Philadelphia retailer Marcus Goldman moved to New York and got into the business of buying customers' promissory notes from jewelers and reselling them to banks. In 1885, he started Goldman, Sachs & Co. with his son-in-law. The new company soon expanded to Chicago and St. Louis and joined the New York Stock Exchange in 1896.

 

It managed its first public offering in 1906 and entered the business of securities dealing and sales in the 1930s. The company became a leader in investment banking after World War II and a leader in mergers and acquisitions in the following decades. The early 1990s was marked by layoffs and an exodus of partners. But the company rebounded with a stronger bond market, cost cuts and a long bull market.

 

In 1998, the company decided to make a limited public offering after decades of resistance, but plans for the offering were postponed due to market conditions. The company eventually went public in 1999. John Corzine, a co-Chairman and co-CEO at the time, was later elected to the U.S. Senate. 

 

Goldman Sachs was one of the companies that suffered significant financial losses for its involvement with Long Term Capital Management hedge fund.

 

Business Segments

 

The company's three business segments are:

Investment Banking

Trading and Principal Investments

Asset Management and Securities Services

Investment Banking provides the following services:

Financial Advisory Services

Debt and Equity Underwriting (includes public offerings and private placements)

Goldman Sachs is involved 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 issued by corporate, sovereign and (government) agency issuers. The company underwrites and originates structured securities, including asset-backed and mortgage-backed securities and collateralized debt obligations.

 

The company's 2003 10-K states that "equity and debt underwriting discounts, as well as trading spreads, have been under pressure for a number of years and the ability to execute trades electronically, through the Internet and through other alternative trading systems, has increased the pressure on trading commissions."

Income/Revenues from Business Segments  

The company reported a net income of $3.0 billion for 2003.

 

The company's total net revenues in 2003 were $16.0 billion. Net revenues from Investment Banking were $2.7 billion or 17 percent of total net revenues. Net revenues from debt underwriting totaled $831 million.

 

The Investment Banking business reported decreased revenues and earnings for the third year in a row, despite a significant increase in debt underwriting. According to the company, overall lower investment banking revenues reflected a decline in industry-wide mergers and acquisitions and equity underwriting activities.