Goldman and Sachs is a multinational investment bank as well as financial services company, which is headquartered in the center of New York CIty.
It offers services of investment management, secure accounting, asset management, prime brokerage services and securities underwriting.
It is one of the largest banking and finance ventures in the world. It is a primary dealer to the United States Treasury, and more generally, a prominent market-maker.
The company also owns Goldman Sachs Bank USA, their direct bank.
As a result of company’s involvement in the asset securitization during the mortgage crisis, Goldman Sachs suffered heavily during the 2007–2008 financial crisis, but received a $10 billion investment from the United States Department of Treasury as a part of Troubled Asset Relief program, a special solution from the higher instances of government to prevent the bailout and bankruptcy of certain subdivisions of the bank.
Former employees of Goldman Sachs have also moved to high-profile government positions. Notable examples include the former Prime Minister of Australia Malcolm Turnbull, the current U.S Secretary of Treasury Steven Mnuchin, as well as the European Central Bank President Mario Draghi and the Governor of the Bank of England Mark Carney. In addition, former Goldman Sachs employees have moved to the New York Stock Exchange, the World Bank, or other competing banking ventures of the world.
History
19th-20th Century.
Goldman Sachs was founded in New York in the year of 1869 by Marcus Goldman. In the year 1882, Goldman’s son-in-law Samuel Sachs joined the new firm. In 1885, Goldman took his son Henry and his second son-in-law Ludwig Dreyfuss into the business, when the firm finally adopted its present name, Goldman Sachs & Co.
The fame to the company was brought by the pioneering solutions to use commercial paper for the entrepreneurs, and by the fact of joining the New York Stock Exchange (NYSE) in 1896.
By the 1898, the firm’s capital begun to rapidly rise, standing at $1.6 million (about $47 million in real value).
Goldman Sachs entered the initial public stock market in 1906, when it took Sears, Roebuck & Co. public. The deal occured due to Henry Goldman’s personal good friendship with the owner of Sears, Julius Rosenwald. After the deal, many companies followed, including F. W. Woolworth and Continental Can.
In the year of 1912. Henry S. Bowers became the first non-member of the founding family to become a partner of the company, and share its profits.
In 1917, in spite of the growing competition and pressure from the other partners and firms, Henry Goldman resigned from his position, due to his pro-German political views.
Control of the firm was now fully in the hands of the Sachs family. Waddill Catchings joined the firm in 1918, and in 1920, the company moved from 60 Wall Street, to $1.5 million 12-floor premises on 30–32 Pine Street. By the year of 1928, Catchings were the largest Goldman and Sachs partner, with the single largest stake of the shares.
On December 4th of 1928, the firm launched the Goldman Sachs Trading Corp, a closed end fund. Despite the countless prosecutions on their behalf, regarding the fact of shade trading and avoiding the Great Depression of 1930s, the company proceeded to function.
Mid-20th Century.
In 1930, the firm ousted the Catchings, and Sidney Weinberg assumed the role of the senior partner, shifting Goldman’s focus away from exchange market trading, on the investment sector of banking. It was Weinberg, who helped restore Goldman’s tainted reputation. With the help of Weinberg, Goldman was the lead advisor on the Ford Motor Company’s IPO in 1956, which was a major prominent fund on the Wall Street. Under Weinberg’s management the firm also founded an investment research division, and a municipal department.
Gus Levy joined the firm in the 1950s as a securities trader, which started a trend at Goldman where there would be two powers generally trying to get the supremacy over other, one from investment banking and one from securities trading.
For most of the 1950s and 1960s, this would be Weinberg and Levy. Levy was a pioneer in Block Trading and the firm established this trend under his guidance. Due to Weinberg’s heavy influence at the firm, it formed an investment banking division in 1956 in an attempt to overcome Weinberg’s authority, thereby lowering his influence.
In 1969, Levy took over the position of Senior Partner from Weinberg, and built Goldman’s trading franchise once again. It is Levy who made the Goldman’s philosophy of “long-term greed”, which implied, that on the grand scheme of large revenue from the long-term investments, small short-term investments are not to be feared.
At the same time, partners reinvested almost all of their earnings in the Levy’s firm, so the focus was always on the future of it. That same year, Weinberg retired from the firm.
During the 1970s, the firm also expanded in several ways. Under the direction of Senior Partner Stanley Miller, it opened its first international office in London in 1970, and created a “private wealth” division along with a “fixed income” division in 1972.
It also pioneered the “white knight” strategy in 1974 during its attempts to defend Electric Storage Battery against a hostile takeover bid from International Nickel and Goldman’s rival Morgan Stanley.
Late 20th Century.
On November 16th of 1981, the firm acquired J. Aron & Company, a commodities trading firm, which merged with the Fixed Income division, to become known as Fixed Income, Currencies, and Commodities.
J. Aron was a player in the coffee and gold markets, and the current CEO of Goldman, Lloyd Blankfield, joined the firm as a result of this merger. In 1985 it underwrote the public offering of the real estate investment trust that owned Rockefeller Center, then the largest REIT offering in history.
In accordance with the beginning of the dissolution of the Soviet Union, the firm also became involved in facilitating the global privatization movement by advising companies that were spinning off from their parent governments.
In 1994, Goldman financed Rockefeller Center in a deal that allowed it to take an ownership interest in 1996, and sold Rockefeller Center to Tishman Speyer in 2000.In April 1997, Goldman was lead underwriter of the Yahoo!. In 1998 it was the co-lead manager of the 2 trillion yen NTT DoCoMo.
In 1999, Goldman acquired Hull Trading Company, one of the world’s premier market-making firms, for $531 million. After decades of debate among the partners, the company became a public company via an initial public offering in May 1999.
The 21th Century.
Goldman Sachs purchased Spear, Leeds, & Kellogg, one of the largest specialist firms on the New York Stock Exchange, for $6.3 billion in September 2000.[31] In January 2000, Goldman, along with Lehman Brothers, was the lead manager for the first internet bond offering for the World Bank.
In 2003, the firm took a 45% stake in a joint venture with JBWere, the Australian investment bank.
In December 2005, four years after its report on the emerging “BRIC” economies (Brazil, Russia, India, and China), Goldman Sachs named its “Next Eleven” list of countries, using macroeconomic stability, political maturity, openness of trade and investment policies and quality of education as criteria: Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, Turkey, South Korea and Vietnam.
Current Operations Worldwide.
In April 2013, together with Deutsche Bank, Goldman led a $17 billion bond offering by Apple Inc., the largest corporate-bond deal in history and Apple’s first since 1996. Goldman Sachs managed both of Apple’s previous bond offerings in the 1990s.
Goldman Sachs was the lead underwriter for Twitter’s initial public offering in 2013. At the time, Goldman’s position as lead underwriter for Twitter was considered “one of the biggest tech prizes around”.
Goldman earned approximately $22.8 million in fees from the Twitter IPO; however, the chief economist and strategist at ZT Wealth said, “Goldman being the first name on the S-1 has little to do with fees. This is about Goldman rebalancing itself as a serious leader and competing with Morgan Stanley’s dominant position in technology.”
In August 2015, Goldman Sachs agreed to acquire General Electrics Co’s GE Capital Bank online deposit platform. Terms of the transaction were not disclosed, but the purchase includes US$8-billion of on-line deposits and another US$8-billion of brokered certificates of deposit. The purchase allows Goldman Sachs to access a stable and inexpensive pool of source of funding.
In April 2016, Goldman Sachs launched a direct bank, GS Bank. In October 2016, Goldman Sachs Bank USA started offering no-fee personal loans under the brand Marcus by Goldman Sachs.
In April 2018, Goldman Sachs bought Clarity Money, a personal finance startup, to be added to its Marcus by Goldman Sachs roster. This acquisition is expected to add over 1 million customers to the Marcus business.
