Goldman Sachs is a global investment bank that has branches in over 20 countries around the globe. It is one of the most prominent investment banking firms in the world, providing a variety of financial advisory and wealth management products. The firm has been trading on U.S. exchanges since 1972.
Goldman Sachs has several segments within its business: Capital Markets, Commercial Banking, Global Markets, International Business, and Hedge Funds. The Financial Modeling department provides investment banking products in the following segments: Fixed Income, Cash Value, Real Estate and Risk Management, Securities and Derivatives, European Equity, Middle East and emerging markets, and Commodities. The Investment Banking segment accounted for the lion’s share of revenue, contributing about two-thirds of sales. Other areas focused are: Corporate Finance, Real Estate & Foreclosures, Global Markets, Global Sustainability, Environmentally Sustainable Productivity, and derivatives.
Within the Commercial Banking segment, Goldman Sachs provides commercial mortgage banking, merchant banking, commercial mortgage refinancing, commercial real estate loan origination, corporate finance, merchant banking, asset financing, and international lender financing. The Global Markets segment accounted for the second largest revenue contributing about twenty percent of sales. Its functions include: commodity markets, currencies, and central banks. The International Business segment offered products to a number of countries including: India, China, Brazil, and other South American and European countries. Its subproducts include: Middle Eastern and Asian countries, Latin America, and other countries in the South Pacific. The hedge fund segment provided products to individual investors.
Another facet of Goldman Sachs is its Global Hedge Fund Industry. Among its many products is Global Underwriting Insights, which provides comprehensive information regarding investment banking, commercial mortgage, and equity and credit risk management across the world. Global Underwriting is one of the few investment banking firms to offer online, full service global risk management and equity underwriting services to their clients. This service is provided by Goldman Sachs Professional Clients in the U.S., Europe, Japan, Australia, Singapore, and Hong Kong.
In order to understand where Goldman Sachs fits into the overall picture of investment banks, it is necessary to understand where all investment banks fit into the picture. Investment banks can be classified into two major categories: wholesale and proprietary. Wholesale investment banks buy loans from borrowers and then sell them to financial institutions and other third parties. These loans may be used for any purpose, including buying property, lending money, buying raw materials, investing in the stock market, etc. Some wholesale investment banks focus on only a single sector or subsector; others may work with a wide variety of sectors. A number of investment banks also work as private equity firms.
One of the major functions of wholesale investment banks is to provide credit facilities to small businesses. Credit facilities are necessary for a business to expand its operations and attract new customers. In order to attract new customers, an investment bank provides short-term funding to help a business meet expenses until it receives longer-term financing from other sources. Some examples of private equity firms include Lehman Brothers, Scottair, Boeing Commercial Airline Division, General Electric, Merck, Prudential Securities, Reebok, Schwab, Alcoa, Philip Morris, Caterpillar, Wal-mart, Microsoft, AT & T, and Freddie Mac.
Another function of investment banks is to provide low-risk investments in specific sectors or companies. These sectors may be growing industries or they might be established businesses that need to inject capital in order to grow. In countries around the world, there are a variety of investment banks that function in different fields. Examples of countries with a large number of investment banks include India, China, South Africa, Japan, and the United Kingdom.
Bond markets are among the main areas of focus for investment banks. In order to buy and sell financial securities, banks provide money market and government bond loans. There are two types of commercial banks: proprietary and mainstream. Proprietary banks tend to concentrate on issuing bonds and lending money, whereas mainstream banks provide a variety of services related to banking, insurance, commodity trading, investments, financial markets, and corporate finance.