Goldman Sachs PowerPoint

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 O’Connor, Lisa Brill, Tom Iadanza, Jay Lee, Michael Quijano, Anthony Sorrentino

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.

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

Revenues (millions) for Year

2007 2006 2005 2004

1st Quarter 22,280 17,246 9,964 7,905

2nd Quarter 20,351 18,002 8,949 7,676

3rd Quarter - 15,979 12,333 6,803

4th Quarter - 18,126 12,145 7,455

Year - 69,353 43,391 29,839

2008 2007 2006 2005

1st Quarter E5.19 6.67 5.08 2.94

2nd Quarter E4.98 4.93 4.78 1.71

3rd Quarter E4.45 E6.13 3.26 3.25

4th Quarter E5.87 E5.41 6.59 3.35

Year E20.49 E23.14 19.69 11.21

Earnings per share ($) for Year

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

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

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

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

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

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.

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.

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

Domestic Competitors

Competitors Percentage (%) of the Market Share

Goldman Sachs 28.6%

Citigroup 27.2%

Morgan Stanley 25.7%

JPMorgan 23.4%

Merrill Lynch 19.7%

Global Competitors

Global investment banks Goldman Sachs Citigroup Morgan Stanley JPMorgan Chase Merrill Lynch Europe’s Credit Suisse UBS AG Deutsche Bank

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

Global Competitors

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

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)

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.

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

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%

Economic Growth

Investment banks: sales, trading, and merger advisory businesses remain strong

despite increased market volatility Sales and Trading:

generate most of industry’s revenues Goldman Sachs:

FICC generated net revenues of $4.6 billion Equity trading revenues increased 35% Trading commissions increased 10%.

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

Year Announced Deals Percent (%) Increase

2006 $3.8 trillion 37.9%

2007 $1.1 trillion (1st quarter) 27%

Economic Growth

Private equity firms $11 billion in fees to Wall Street investment banks

merger boom increased:-advisory fees

-debt lending

-underwriting fees

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.

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

References

www.GS.com www.spiegel.de/international Galenet.galegroup.com Standard and Poor’s Net Advantage Hoover’s Company Records Business & Company Resource Center Finance.yahoo.com en.wikipedia.org