Goldman Sachs Success Essay Research Paper INTRODUCTIONImagine

Goldman Sachs Success Essay, Research Paper

INTRODUCTION

Imagine we could step back to Manahattan s financial district circa 1869, we might see a man in a frock coat and high silk hat hurrying along the cobblestone streets. This could be Marcus Goldman, an immigrant from Europe and maturing entrepreneur. Would he have ever thought that he would be the founder of the greatest financial success stories of the twentieth century. (Endlich, 1999)

Goldman Sachs is a global leading investment banking and securities firm. It commenced as a little-known business, founded by Marcus Goldman in 1869. Almost 20 years later, Samuel Sachs joined his father-in-law, Marcus Goldman, and created Goldman Sachs as a private partnership with a minor reputation and a huge dream (Endlich, 1998). After more than a century of substantial growth from 2 to 200 private partners, the firm became a public company in 1999, creating a publicly traded organization worth $48 billion.(fortune, 1999). Along with a presence in over 90 countries, across three continents, the Goldman Sachs group Inc. is headquartered in New York City and has 41 offices nationwide. Goldman is the investment banker to companies such as Microsoft, Ford Motor Company, General Electric, and American Express. This prestigious investment-banking firm is one of the oldest, largest and omniscient companies across the globe.

The two main services provided by Goldman Sachs include investment banking and equities. The departments of the Investment Banking Division include The Corporate Finance Department, which advises clients worldwide on structuring and carrying out financial strategies, to meet their financial objectives across a wide range of industries including retail, high technology, chemical production and transportation (Business Week, 1997). The Mergers and Acquisitions Department provides advice worldwide regarding acquisitions, divestitures, joint ventures, recapitalizations, leverage buyouts and takeover attempts (New Yorker) The merger and acquisition process involves analyzing features of companies and industries; determining likely buyers and sellers; and marketing, negotiating and closing transactions. The real estate department provides complex and original investment banking services worldwide to the primary real estate companies. Their clients include real estate investment trusts, the hospitality industry and a variety of fortune 500 companies (Fortune, 1997).

The Equities Division of the Goldman Sachs empire is another profitable business for the firm. This division offers every kind of equity feature and plays a large role in the primary equity markets across the globe. Working with corporations, institutions, governments and individuals, the equity division develops customized investment strategies and facilitates activity in both public and private equity markets (Goldman Sachs pamphlet, 1997). Their wide range of expertise allows them to successfully achieve their clients goals, which include; trading large amounts of equity securities in various currencies; portfolio hedging and restructuring; providing market information, investment perspective and guidance; facilitating initial public offerings and governmental privatization programs (Goldman Sachs pamphlet, 1997) and advising wealthy individuals and families on ways in which to build and protect their posessions.

One example of how the equities division provides a great deal of business for the firm is when 1997 Goldman Sachs made one of the biggest equity trades through buying and selling a 2 billion dollar block of British Petrolium within 24 hours. This evidence is authoritative because it is provided in the recommended and prevalent Business Week Magazine. Smaller services provided by the firm entail: Fixed income, currencies and commodities, asset management, Global Operations, technology, treasury, Controllers, Credit, Tax, Management controls and legal advising.

NOTABLE EVENTS

As early as 1880, relationships with major organizations such as several European banks were being formed to support the international needs for its clientele. Their relationships with Sears and Ford Motor Company are another two examples of their dealings with major corporations during the early 20th century. A recent article in Fortune magazine, in 1997, reported Goldman Sachs paying $1.325 billion for a two-thirds of AMF, owner of 390 bowling centers and the world biggest manufacturer of bowling equipment. (GS.com)

Goldman Sachs, joined the New York Stock Exchange in 1896, (GS.com) and quickly became a leader on Wall Street by the 1930s. During the 1950s, the firm played a leader role in establishing the U.S. municipal bond market as a means of financing public projects. And in 1981, the firm acquired J. Aron & Co., which later on became a leader in currency and commodity markets worldwide. (GS.com)

Goldman Sachs reputation of being the best and brightest goes back to the 1920s when it was one of the first Wall Street Firms to recruit MBAs. During the 1950s, it was first to establish a group of professionals advising institutional investors on trading large blocks of stock, at the same time serving the individual investor. In addition, it was the first to set up a group to market it s the full range of investment banking services, an approached that came to be imitated by competitors.(GS.com) In 1