Goldman Sachs 2003 Annual Report Download - page 32

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ASSET MANAGEMENT AND SECURITIES SERVICES
We offer a broad array of investment strategies, advice and planning
across all major asset classes to a diverse client base of institutions and
individuals, and provide prime brokerage, financing services and securities
lending services to mutual funds, pension funds, hedge funds, foundations,
endowments and high-net-worth individuals.
Our Asset Management and Securities Services segment is divided into
two components: Asset Management and Securities Services.
ASSET MANAGEMENT
Asset Management provides investment
advisory and financial planning services
to a diverse client base of institutions
and individuals and generates revenues
in the form of management and incentive
fees. Assets under management include
our mutual funds, separate accounts
managed for institutional and individual
investors, our merchant banking funds
and other alternative investment funds.
SECURITIES SERVICES
Securities Services includes prime bro-
kerage, financing services and securities
lending, all of which generate revenues
primarily in the form of interest rate
spreads or fees.
TRADING AND PRINCIPAL INVESTMENTS
Trading and Principal Investments facilitates customer transactions with
a diverse group of corporations, financial institutions, governments and
individuals and takes proprietary positions through market making in, and
trading of, fixed income and equity products, currencies, commodities and
derivatives on such products. In addition, we engage in floor-based and
electronic market making as a specialist on U.S. equities and options
exchanges and we clear customer transactions on major stock, options
and futures exchanges worldwide. In connection with our merchant
banking and other investment activities, we make principal investments
directly and through funds that we raise and manage.
Our Trading and Principal Investments segment is divided into three
components: Fixed Income, Currency and Commodities, Equities and
Principal Investments.
FIXED INCOME, CURRENCY AND
COMMODITIES (FICC)
FICC makes markets in and trades
interest rate and credit products,
mortgage-backed securities and loans,
currencies and commodities, structures
and enters into a wide variety of
derivative transactions, and engages in
proprietary trading. FICC’s principal
products are: commodities and com-
modity derivatives, including our power
generation business; credit products,
including investment-grade corporate
securities, high-yield securities, bank
loans, municipal securities, credit
derivatives and emerging market debt;
currencies and currency derivatives;
interest rate products, including interest
rate derivatives and global government
securities; money market instruments,
including the matched book; and
mortgage-backed securities and loans.
PRINCIPAL INVESTMENTS
Principal Investments primarily
represents net revenues from our
merchant banking investments,
including the increased share of the
income and gains derived from our
merchant banking funds when the
return on a fund’s investments
exceeds certain threshold returns
(merchant banking overrides), as
well as unrealized gains or losses on
our investment in the convertible
preferred stock of Sumitomo Mitsui
Financial Group, Inc.
EQUITIES
Equities makes markets in, acts as a
specialist for, and trades equities and
equity-related products, structures and
enters into equity derivative transactions,
and engages in proprietary trading.
We also execute and clear customer
transactions on major stock, options
and futures exchanges worldwide.
FICC
NET REVENUES
(in millions)
01 02 03
$4,272
$4,680
$5,596
PRINCIPAL INVESTMENTS
NET REVENUES
(in millions)
01 02 03
-$228
-$35
$566
TRADING AND PRINCIPAL
INVESTMENTS
NET REVENUES
(in millions)
01 02 03
$9,570
$8,647
$10,443
ASSET MANAGEMENT
AND SECURITIES
SERVICES
NET REVENUES
(in millions)
01 02 03
$2,405
$2,509
$2,858
ASSET MANAGEMENT
NET REVENUES
(in millions)
01 02 03
$1,473
$1,653
$1,853
SECURITIES SERVICES
NET REVENUES
(in millions)
01 02 03
$932
$856
$1,005
30 GOLDMAN SACHS 2003 ANNUAL REPORT
EQUITIES
NET REVENUES
(in millions)
01 02 03
$5,526
$4,002
$4,281
COMMISSIONS
TRADING