Goldman Sachs
Goldman Sachs Group, Inc., founded in 1869 by Marcus Goldman, is a prominent international investment bank and wealth management firm headquartered in New York City. The company employs around 43,900 individuals and operates through four main divisions: investment banking, global markets, asset management, and consumer and wealth management. Goldman Sachs provides a range of services including financial advisory, brokerage, and risk management for institutional clients and individuals. As of 2022, it managed approximately $1.6 trillion in assets and reported revenues of $62.8 billion.
The firm gained significant recognition for its role in the financial industry, particularly after becoming a publicly traded company in 1998, which facilitated its rapid international expansion. Goldman Sachs has been influential in shaping financial markets and is known for its network of alumni who have taken high-profile roles in government and public service. Despite its successes, the firm has faced scrutiny during economic downturns, notably during the 2008 financial crisis, and continues to engage with global issues, including recent developments in China and its withdrawal from Russia following the invasion of Ukraine.
Goldman Sachs
Company information
- Date founded: 1869
- Industry: Financial services
- Corporate headquarters: New York, New York
- Type: Public
Overview
Formally known as Goldman Sachs Group, Inc., Goldman Sachs is a major international investment bank and wealth management firm. As of 2023, the company employed approximately 45,000 people, and its chief executive officer (CEO) was David M. Solomon. Solomon assumed leadership of the Goldman Sachs executive team in October 2018.
Goldman Sachs operates across four main service divisions: investment banking, global markets, asset management, and consumer and wealth management. The company’s investment banking division offers brokerage and financial advisory services to public and private enterprises, and individual clients. It also finances businesses through loan programs and capital raises. Goldman Sachs’ global markets segment serves institutional clients, offering funding and risk management advice to operators who trade in securities and other assets bought and sold on financial markets. The asset management and consumer and wealth management divisions deliver a suite of services to individual investors and private organizations, providing strategic support and advice to clients seeking to protect and build their wealth.
In 2024, Forbes ranked Goldman Sachs twenty-third on its annual Global 2000 list of the world’s largest publicly traded companies. The company also appeared in thirty-fifth place on the Forbes 2021 Green Growth Companies list. As of 2024, the company had approximately $1.7 trillion in assets under management, on which it earned $1.16 trillion in revenue and $9.4 billion in profit. In August of 2024, the company set to layoff approximately 4 percent of their workforce due to performance drivers, market conditions, and financial prospects.
History
Goldman Sachs traces its history to 1869, when the firm was founded by Marcus Goldman. Goldman was a German immigrant who spent more than two decades as a salesman and shopkeeper before entering the New York banking industry. He began specializing in commercial promissory notes, a short-term business financing instrument. He continued to operate the fledgling company on his own until 1882, when Samuel Sachs, Goldman’s son-in-law, joined him. Three years later, Goldman Sachs expanded to a partnership when Henry Goldman and Ludwig Dreyfus became part of the company.
In 1896, Goldman Sachs joined the New York Stock Exchange. By this point, the company had become a preferred provider of business financing among influential members of the German American and Jewish American banking communities. Marcus Goldman continued to lead Goldman Sachs until his retirement in 1900, by which time the firm had earned a distinct competitive advantage and an elite reputation for its trustworthiness and excellent customer service.
Goldman Sachs achieved a milestone in 1906 when it led the first initial public offering (IPO) in its history, taking the retail firm Sears, Roebuck and Company public. The company managed to weather the Great Depression (1929–1939) better than most of its peers, leveraging its strong financial position to stabilize its operations with strategic, value-conscious acquisitions. By this time, Goldman Sachs was led by Sidney J. Weinberg, who came to be known as “Mr. Wall Street” during the course of his career. Weinberg remained a senior partner, heavily involved in the company’s leadership for most of four decades and is widely credited with bringing the firm into its modern era. Goldman Sachs emerged as one of the leading investment banks in the United States in the decades following World War II (1939–1945), expanding internationally in 1970 by opening a London office and again in 1974 with locations in Tokyo and Zurich, Switzerland. By the 1990s, Goldman Sachs had consolidated its standing among the preeminent leaders of the US financial services industry.
In 1998, after nearly 130 years as a privately held firm, Goldman Sachs elected to take its shares public in a historic vote by the company’s managing partners. A wealth of new investment capital flowed into the firm, facilitating a period of rapid international expansion and franchising. However, Goldman Sachs came under considerable scrutiny during the global financial downturn of 2008–2009, often known as the Great Recession. In 2010, Goldman Sachs established an internal Business Standards Committee (BSC), comprised of senior company officers tasked with ensuring the firm’s investment activities conform to its fourteen stated business principles as well as external compliance standards. In 2016, in a significant strategic shift, Goldman Sachs launched Marcus, its online consumer banking division, shifting the company toward wealth management and consumer banking.
Impact
Finance industry analysts have characterized Goldman Sachs as one of the most powerful investment banks in the world. Its large size and the enormous value of its assets under management—which exceeded $1 trillion as of 2024—gives Goldman Sachs significant influence in international financial markets. Goldman Sachs alumni have also routinely moved into high-profile positions in government and the public sector: some recent examples include Jon Corzine, Robert Rubin, Hank Paulson, and Mario Draghi. Corzine was a top executive at Goldman Sachs before transitioning into politics in 1999, becoming a senator and the Governor of New Jersey. Like Corzine, Rubin was the second-most powerful executive at Goldman Sachs prior to entering politics, where he served as Secretary of the United States Treasury during the Clinton administration. Paulson was reportedly earning $38 million per year as Goldman Sachs CEO before assuming leadership of the US Treasury in 2006. Draghi was an economist and finance official with the United Nations (UN) World Bank and Italy’s Ministry of Economy and Finance before joining Goldman Sachs in 2002. He went on to a stint as President of the European Central Bank (ECB) before becoming the Prime Minister of Italy in 2021.
These trends continued in the 2020s under the administrations of US Presidents Donald Trump and Joe Biden, both installing multiple people into key positions who had strong ties to Goldman Sachs. In 2022, the company announced it was pulling its business from Russia as a result of the country's invasion of Ukraine and the sanctions levied in the country. In 2022, Goldman Sachs continued to pursue an objective of Chinese expansion. The company was working to become the first foreign financial institution to earn 100 percent ownership of its joint venture operations in China. A 2021 Washington Post article noted that the firm’s ambitions increasingly conflicted with US diplomatic and economic policy toward China, a country accused of numerous human rights violations. In 2024, Goldman Sachs succeeded in obtaining regulatory approval to sell funds in China.
Bibliography
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Caplan, Sheri J. “Marcus Goldman (1821–1904).” Immigrant Entrepreneurship, 22 Aug. 2018, www.immigrantentrepreneurship.org/entries/marcus-goldman. Accessed 1 May 2023.
Cohan, William D. Money and Power: How Goldman Sachs Came to Rule the World. Knopf Doubleday Publishing Group, 2011.
“Goldman Sachs Group, Inc. 2022 Form 10-K.” SEC, 31 Dec. 2022, www.sec.gov/ix?doc=/Archives/edgar/data/886982/000088698223000003/gs-20221231.htm. Accessed 1 May 2023.
Li, Selena. “Goldman Sachs Granted Licence for China Fund Sales.” Reuters, 13 Dec. 2024, www.reuters.com/business/finance/goldman-sachs-granted-licence-china-fund-sales-2024-12-13/. Accessed 9 Jan. 2025.
Lynch, David J. “Wall Street’s March into China Increasingly at Odds With Biden’s Tough Stance.” Washington Post, 23 Mar. 2021, www.washingtonpost.com/business/2021/03/23/goldman-sachs-china-biden. Accessed 1 May 2023.
Meyer, Theodoric, and Alex Thompson. “Goldman Sachs Vets Quietly Added to Biden Transition.” Politico, 14 Dec. 2020, www.politico.com/newsletters/transition-playbook/2020/12/14/goldman-sachs-vets-quietly-added-to-biden-transition-491143. Accessed 1 May 2023.
Murphy, Andrea, and Isabel Contreras. “The Global 2000 2024.” Forbes, 6 Jun. 2024, www.forbes.com/lists/global2000/. Accessed 9 Jan. 2025.
Saini, Manya. “Goldman to Lay Off a Few Hundred Employees in Annual Talent Review, Source Says.” Reuters, 30 Aug. 2024, www.reuters.com/business/finance/goldman-sachs-lay-off-over-1300-workers-wsj-reports-2024-08-30/. Accessed 9 Jan. 2025.